Duty Zero by CDF off to strong start in Hong Kong
CDF-Lagardère (CDFL), the joint-venture from China Duty Free Group (CDFG) and Lagardère Travel Retail, which won the contract to operate the duty-free liquor and tobacco stores at Hong Kong International airport (HKIA) has revealed initial performance of its Duty Zero by CDF-branded stores has been better than expected.
As reported, the six Duty Zero by CDF stores, spanning 1,631sq m were launched by CDFL on November 18. According to the joint-venture, business performance in the first 10 days has been booming with sales revenue higher than expected.
Purchasing strengths
The succssful opening is believed to be due to the purchasing strengths of China Duty Free Group (CDFG) and Lagardère Travel Retail, which have been fully exploited in the commodity procurement process. This has led to a wider range of Chinese liquor and tobacco and imported liquor and wine collection being offered to consumers.
CDFL also suggested the implementation of the most “competitive pricing strategy” in the Asia/Pacific airport market contributed to its early success; liquor and tobacco products are now 15%-30% lower in price.
Another key factor was the decision of CDFL to equip HKIA with an international management and operation team. This has ensured the smooth and successful operation of the newly opened stores.
CDFG and Lagardère Travel Retail are also understood to have provided support and assurance to HKIA in relation to commodity mix, supply of goods, pricing strategy and personnel support. This was after CDFG adopted a similar strategy in terms of commodity procurement and pricing following its triumph in the recent Beijing Capital International airport tender.
In addition, support from parent company China National Travel Service Group, the largest travel service provider in China, on elements such as passenger flow and integrated marketing also helped, according to the retailers.
“Injected new confidence and expectation”
“This has ensured the smooth and successful operation of the newly opened stores.”
When interviewed by Chinese media, China National Travel Service Group vice general manager Li Gang said: “The operation of HKIA represents a milestone and touchstone for the development of China’s duty-free industry.”
Following its triumph in the HKIA tender, CDFG president Chen Guoqiant vowed to do everything possible to deliver a “satisfactory result” for HKIA and its customers.
Hong Kong Airport Authority is understood to be please with pleased with the initial performance of the liquor and tobacco stores, which have “injected new confidence and expectation in the international development of China’s duty-free companies”, according to CDFL.
Over 3,000sq m
Meanwhile, two Duty Zero by CDF stores, have opened in the East and West lobbies targeting domestic passengers from airlines such as Air China and Hong Kong, European and American passengers respectively.
Ultimately, eight duty-free liquor and tobacco stores covering 3,400sq m will be introduced, including the “most complete single malt whiskey mix among Asia Pacific airports” and “most complete Asian alcohol and beverage product mix among global airports,” according to CDFL.
A Hennessy counter and store featuring Hong Kong afternoon tea and local food will also open, with all stores set to be operational by June 2018 and present a “more beautiful” image to consumers.
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