Who will win the Beijing Airport duty-free tender after shock Shanghai outcome?

CHINA. Bids closed yesterday (19 December) on the two-pronged open tender covering the departures and arrivals duty-free concessions at Beijing Capital International Airport. The results are expected to be announced in coming days.

The tender, issued by Beijing Capital Airport Commercial & Trading Co (BACT), embraces Terminals 2 and 3, with a total duty-free area exceeding 14,000sq m and a concession period of nearly eight years until 10 February 2034.

In 2017 BACT awarded the two concessions to China Duty Free Group (T2) and Sunrise Duty Free (T3), respectively, following a similar dual tender. Before that the businesses were run under a single concession by Sunrise Duty Free (China) Co.

However, as reported, China Duty Free Group completed the 51% acquisitions of Sunrise Duty Free (Shanghai) Co Ltd and Sunrise Duty Free (China) Co Ltd during 2017 and 2018, an agreement that is turning out to have profound repercussions for the respective Shanghai and Beijing tenders.

Shock to follow shock?

Until recently, it was widely assumed that status quo would prevail in Beijing but the result has been thrown into doubt by the shock outcome of the combined duty-free tender for Shanghai Pudong and Hongqiao international airports, which saw incumbent Sunrise Duty Free (Shanghai) Co Ltd unable to bid due to a clash with its 51% parent company CDFG.

With Sunrise out of the race, China Duty Free Group (CDFG) and Avolta – as Dufry (Shanghai) Commercial Co – split the spoils in an outcome few would have predicted even a few days earlier (including Avolta, which is known to have been surprised by its success). 

As reported, both retailers will operate in a joint venture with the airport company, CDFG and Avolta each holding 51%.

Dufry (Shanghai) Commercial Co gained the international departures and arrivals duty-free concession for  Shanghai Pudong International Airport Terminal 1 and Satellite Hall 1 (S1), while CDFG snapped up Pudong’s T2 and Satellite Hall 1 contracts.

CDFG was also awarded the departures and arrivals duty-free concession at Shanghai Hongqiao International Airport T1.

According to the Shanghai tender guidelines, a single bidder could not be awarded both Concession 1 and 2. However, a bidder winning either Concession 1 or Concession 2 remained eligible to also win Concession 3. But no observer spoken to by The Moodie Davitt Report in the run-up to the awards, predicted such a result.

Beijing set to be an all-Chinese affair?

So what does all that mean for the Beijing Capital International Airport tender? Bidders may submit proposals for both concessions (see details below), but a single retailer can be awarded no more than one contract.

Given the near certainty that CDFG will retain its position, which rival will occupy the other? Was Sunrise Duty Free again unable to bid?

In Shanghai, CNSC and Avolta bid on the Pudong and Hongqaio concessions, while powerful department store-to-travel retailer Wangfujing Duty Free tabled an offer for the Hongqiao opportunity only.

Both Wangfujing Duty Free and CNSC are Beijing-based and effectively state-controlled and therefore highly likely to have bid in Beijing. It us doubtful that any foreign bidder (including Avolta) would have fancied its chances of winning such a high-profile presence in the Chinese capital so an all-Chinese splits is the expected outcome.

As reported, BACT said the 2025 tender marks a new strategic allocation of commercial resources at Beijing’s main aviation hub.

“As one of China’s most critical aviation gateways, this large-scope tender for duty-free concessions at Beijing Capital International Airport represents a significant market-oriented operation of its commercial assets,” the company observed.

“It is also a key measure to enhance passenger consumption experience and boost the airport’s non-aeronautical revenue. The commencement of this new operational cycle signals that Beijing’s airport commercial services are poised to enter a new phase of development.”

From our earlier story

Tender overview

Remarkably substantial in its scope, the tender involves a total combined area reaching 14,213.07sq m, of which 2,355.28sq m is arrivals duty-free space, and 11,857.79sq m is allocated to departures.

The tender is divided into two concessions:

Concession 1 (T3): Total area of 10,646.74sq m

• Arrivals duty-free shop: 1,938.72sq m
• T3E departures duty-free shop:  8,310.19sq m
• T3D departures duty-free shop: 397.83sq m

Concession 2 (T2): Total area of 3,566.33sq m

• Arrivals duty-free shop: 416.56sq m
• Departures duty-free shop: 3,149.77sq m

Bidders may submit proposals for both, but a single bidder can be awarded no more than one concession.

The tender announcement explicitly states that if a bidder is ranked as the top candidate for both concessions, they must voluntarily withdraw from one of them.

This measure is designed to “ensure operational diversity and foster healthy competition”.

In its tender announcement, BACT set qualification requirements for bidders:

• Bidders must be domestic enterprises with duty-free business qualifications, or reputable foreign-invested enterprises with a proven track record.
• They must be legally registered within the territory of the People’s Republic of China and possess independent legal person status.
• They must have no record of serious breach of trust in the past three years; relevant verifications will be conducted.
• Affiliated entities are prohibited from bidding for the same tender section, and consortium bids are not accepted in this tender. ✈