Reporter: Zhang Xinyu
Editor: Zhou Zhuoran
As Hainan's duty-free shopping popularity continues to rise, the ranking of the scale of global duty-free retailers has changed.
According to the travel retail industry media The Moodie Davitt Report, CDFG (hereinafter referred to as CDFG) in the first half of 2020 revenue reached 19.309 billion yuan ($2.855 billion), and its tax-free business brand "China "Free Group" has therefore become the tax-free retailer with the highest sales in the world.
Prior to this, Dufry, the Swiss duty-free giant, ranked first in the sales of duty-free retailers in the world for six consecutive years. In the first half of 2020, Dufry's ranking slipped from number one for many years to number two, with revenue of US$1.73 billion. South Korea’s Lotte Duty Free Shop and The Shilla Duty Free Shop ranked third and fourth, with revenues of US$1.25 billion and US$1.11 billion, respectively.
Interface Fashion combed through the 2020 semi-annual report of multiple duty-free retailers and found that all duty-free retailers recorded a decline in revenue in the first half of the year, while the decline in China's CDFG was relatively small.
In the first half of 2020, China Dufry's revenue fell by 22.02% year-on-year, while Dufry's revenue in the first half of 2020 plummeted by 60.6% year-on-year.
In fact, CDF’s revenue decline in the first half of the year was mainly due to the sharp decline in the first quarter, but there was a clear recovery in the second quarter and it has achieved growth, with a year-on-year increase of 5.4%, reaching 11.673 billion yuan.
The rapid recovery of CDFG in China is due to the growth of duty-free shopping in Hainan.
Financial report data shows that in the first half of 2020, the duty-free shops in Sanya will achieve operating income of 5.997 billion yuan, a year-on-year increase of 12.16%. Hainan Duty Free Products Co., Ltd. (hereinafter referred to as Hai Duty Free Co., Ltd.) acquired by China Duty Free has achieved operating income of 3.031 billion yuan, a year-on-year increase of 136.35%.
With the formal implementation of Hainan’s outlying island duty-free policy on July 1, Hainan’s duty-free shops have achieved even greater sales growth. This means that for the whole year of 2020, Hainan duty-free shopping in full swing will give China CDF a more significant boost.
According to the statistics of Haikou Customs, from July to August 2020, the customs supervised a total of 5.58 billion yuan of duty-free shopping on outlying islands, a year-on-year increase of 221.9%.
In Hainan’s outlying islands’ new tax-free policy, the specific rules that can best promote duty-free shopping include increasing the annual tax-free shopping limit from 30,000 yuan to 100,000 yuan per person, increasing the number of off-island duty-free products from 38 to 45, and a single item of 8,000 yuan tax exemption. The quota requirement was cancelled.
The accelerated return of China's luxury consumption has also led to the upsurge of duty-free shopping in Hainan.
According to the recent financial reports issued by many luxury goods companies, all markets around the world fell in the first half of the year, and only China showed a recovery or even double-digit growth in the second quarter.
The latest forecasts released by the Boston Consulting Group show that the Chinese market may become the only growth market for the global luxury goods market in 2020. After the impact of the epidemic, the demand for luxury goods in the United States and Europe is expected to shrink by 45% as a whole, while the growth in demand from the Chinese market will still reach 30%.
Currently, CDFG's performance is receiving greater recognition.
On August 5, the World Brand Lab, one of the world’s three major brand value assessment agencies, released the 2020 "China's 500 Most Valuable Brands" analysis report, and CDFG ranked first on the list with a brand value of 83.659 billion yuan. 60, this is also the first time that a tax-free company has entered the list.
CDFG has also begun to attract high-quality partners from all over the world.
On September 17, CDFG and the Swiss Foundation for Fine Watchmaking (FHH) held a "cloud" signing ceremony and formally signed a memorandum of cooperation. The two parties will jointly hold the first "Watches and Miracles" Sanya High-end Watch Exhibition in Sanya International Duty Free City in Haitang Bay, Sanya from October 2 to 31, open to the public.
Emmanuel Perrin, chairman of the Swiss Fine Watchmaking Foundation, said at the signing ceremony, “China has always been one of the most important markets for fine watch brands, especially Richemont. Especially in the past few months, the Hainan Island market has become more and more important. "
