China Duty Free Group (CDFG) Deputy General Manager Zhao Feng delivered a superbly informative overview of the company’s development to date – and an intriguing insight into its future development plans – at today’s TFWA Asia Pacific conference. Of particular interest were the projections for CDFG’s new Haitang Bay International Shopping Complex, due to open in August.
 
 

 
Ms Feng confirmed that China’s duty free and travel retail market continues to generate steady double-digit sales growth, underpinned in particular by the ongoing middle class expansion, forecast to grow annually by +11% from 2010-2015. “China’s tourism industry is flourishing,” she noted. “And by 2020 [the Chinese] will account for 50% of global luxury spending.” 
 

 
That spend will be significantly bolstered by the opening this summer of the Haitang Bay complex, which will be the world’s largest duty free shopping centre. “Haitang Bay will feature 21 product categories, and more than 200 brands – double the current amount,” noted Ms Feng. Confectionary, toys and health products will be among the new arrivals.
 

  
The complex, which covers around 70,000sq m of duty free space, will also incorporate a strong duty paid, food & beverage and entertainment offer. “Haitang Bay will be a tourist destination [in its own right],” Ms Feng underlined.
 
    
CDFG confirmed its ambitious business projections for the complex, in line with the scale of the development. “We anticipate sales that are 30-50% higher than our Sanya downtown duty free store,” Ms Feng revealed. That store has seen turnover grow significantly in the past three years, with average daily sales of six million yuan. Consumers aged 26-35 currently account for 40% of the total sales volumes. Female consumers outnumber males, but the latter accounts for a bigger proportion of sales, thanks to a higher per capita spend.
 
  
  
Ms Feng highlighted the increasingly important role of the internet in terms of information and buying behaviour, and predicted a significant rise in luxury e-commerce in the near future. “We understand emerging trends,” concluded Ms Feng, “and we are a trusted brand for Chinese consumers.” 
 
SOURCE: Moodie Report
 
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