Over the past year we have all heard news that doesn't bode well for retailers in China. Brands are closing stores, growth is slower than we hoped for and, as we have observed at SmithStreet, consumers are trading in luxury goods for luxury experiences. With all that being said, we have some good news to bring you today. Airports and duty free are on the rise, beating the odds and don't look to be slowing down anytime soon.
Where is the Best Place to Open a Store? Airports!
August 19th 2016:
According to research firm Credence Research's "Global Airport Retail Market" report, airport retail channels will reach 90 billion US dollars by 2020
Bain & Company stated that despite market growth of only 2% in luxury, airport channels increased as much as 18%, the current airport channels accounted for a global luxury commodities market share of about 6%
In a report by Exane BNP Paribas they found that the average growth rate of tourism retailing channels including airports and duty-free shops has increased by 8.4% over the past 10 years, which is 6% higher than the overall luxury goods market
Credence Research said Asian airports will become the most active retail market, accounting for 40.5% of global airport retail
Credence Research said that in the airport retail channel, fashion and accessories category accounted for half of the revenue
China Approves 16 New Duty Free Arrivals Shops
November 16th, 2016
China’s Ministry of Finance has approved applications to open 16 duty free arrival shops in 10 international airports and at six land border crossing points
Four state-backed enterprises (China Duty Free Group (CDFG), China National Service Corporation For Chinese Personnel Working Abroad (CNSC), Shenzhen Duty Free and Zhuhai Duty Free) with existing duty free retail operations have qualified to bid for the 16 arrival shop licenses that are due to be awarded during the next six months.
The 10 airports approved to open duty free arrival shops include some of China’s top ten airports. Note: this does not include airports that already offer duty free arrival shopping services under a special government dispensation issued in 2008 to prepare for the 2012 Beijing Olympic Games
New airports selected to open duty free arrival shops are believed to include: Chengdu Shuangliu International Airport, Chongqing Jiangbei International Airport, Dalian Zhoushuizi International Airport, Guangzhou Baiyun International Airport and Tianjin Binhai International Airport
China’s Ministry of Finance regulations permit arrival shops to sell perfume and cosmetics, liquor and tobacco, confectionery, fashion items, accessories and watches.
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