CHINA. China Tourism Group Duty Free Corporation (CTG), the parent company of the world’s second-largest travel retailer China Duty Free Group, has reported a -19.6% year-on-year revenue drop in 2024 to CNY56.47 billion (US$7.8 billion).
Full-year results released by the company revealed a gross profit decline of -16.8%, reaching CNY17.35 billion (US$2.37 billion), which the group attributed to a “complex and challenging business environment”.
Net profit attributable to shareholders of the company stood at CNY4.32 billion (US$591 million), marking a -36.3% decrease from the previous year.
Gross profit margin slightly fell by 0.16 percentage points year-on-year, to 30.72% during the year.
CTG Chairman of the Board Fan Yunjun said, “Looking back, 2024 marked a year of profound transformation in the global consumer market. It also marked a pivotal milestone for cdf as it celebrated its 40th anniversary, as well as a year for setting its strategic goals and making pioneering innovations and breakthroughs.
“During the year, guided by our corporate mission of ‘sharing the joy of shopping and extending the enjoyment of travel’, we worked together in unity and dedication to seek progress while maintaining stability and made all-out efforts in advancing high-quality development of the company.”
The group highlighted initiatives aimed to strengthen the business, noting that it “anchored its strategic focus, deepened reforms and innovation, and closely followed evolving consumer needs to solidly advance its various initiatives”.
Key strategic priorities include expansion in the Hainan offshore duty-free channel.
CTG has introduced a new service system at Sanya International Duty-Free Shopping Complex, featuring one service value proposition, eight major service-supporting frameworks and 98 policies and standards.
The shopping emporium was recognised as a ‘worry-free consumption in Hainan’ Five-Star Store during the One Street, One City, One Belt worry-free consumption demonstration site development campaign in the city.
CTG advanced its ‘first-store economy’ strategy by launching several key retail concepts, including Coach’s debut two-storey travel retail flagship in China, Estée Lauder’s first global two-storey flagship and Lancôme’s pioneering Domaine de la Rose concept in Sanya.
The company also launched the country’s first immersive whisky museum, Malt & More Whisky by cdf, in Haikou, and boutiques for luxury brands such as Prada and Gucci.
Expanding channel resources
CTG strategically expanded its retail network by securing operating rights for ten airport and port duty-free stores, including key locations at Guangzhou Baiyun International Airport (Terminal 1), Kunming Changshui International Airport and Shandong Port Qingdao Cruise Home Port.
Leveraging enhanced travel policies and strong international travel demand, the company highlighted positive results in its airport duty-free operations.
Its downtown duty-free operations expanded with 12 new projects, including leasing six stores in cities such as Beijing, Shanghai, Sanya, Dalian, Qingdao and Harbin, complemented by six additional locations in Guangzhou, Shenzhen, Xi’an, Fuzhou, Chengdu and Tianjin.
Outside Mainland China, the company bolstered its presence with openings in Singapore, Hong Kong, Tokyo and Sri Lanka, alongside cruise retail expansion, winning the contract to manage the duty-free store on the H1509 cruise ship under China State Shipbuilding.
Advancing key projects and exploring duty-paid business
The group also ramped up its China Chic initiative through key partnerships between the government and private companies, extending the global footprint of domestic brands.
During the year, CTG has also continued to advance key projects while actively pursuing opportunities in the duty-paid operations.
The company advanced key projects supporting Hainan Free Trade Port development, finalising the Indigo Hotel’s main structure at Sanya Phase I and progressing on Phase III’s underground construction. At Haikou International Duty-Free complex, Plot 1 has completed specialised finishes, while Plot 4’s hotel structure was topped out.
Reinforcing its duty-paid business, CTG teamed up with Gansu Civil Aviation for the retail programme at Lanzhou Zhongchuan International Airport T3, and SIPG Ruitai for the Long Beach Commercial Complex project near the Shanghai Wusongkou International Cruise Terminal.
It also secured duty-paid leases at Shanghai Hongqiao and Harbin airports, exploring new areas such as catering.
Optimising operational quality and efficiency
The company also optimised high-margin product mixes and promotional strategies to boost growth.
This was complemented by a brand portfolio expansion, including the launch of over 200 domestic and international brands last year, with a particular focus on developing its China Chic offering.
Supply chain operations were enhanced with the introduction of standardised procedures and improved inventory management.
The company also achieved notable success in customer relationship management, growing its membership base to 38 million through advanced omni-channel integration which boosted both conversion rates and customer retention.
Enhanced store classification systems and strengthened terminal management contributed to refined retail operations.
Empowering business growth with strategic marketing
CTG is driving growth through strategic initiatives, across marketing, brand promotion and digitalisation. These include the launch of the ‘C-LOONG’ IP campaign for the Year of the Dragon and large-scale shopping events such as the 4th cdf Watch Carnival, the 6th cdf Hainan Duty-Free Shopping Festival, cdf Global Season of Special Offers and cdf Annual Shopping Gala.
In addition, the company actively participated in industry events such as the China International Consumer Goods Fair, TFWA Asia Pacific Exhibition & Conference and The Moodie Davitt Report’s The Trinity Forum.
It also won accolades including the 2024 German National Design Award for its ‘Mystery’ ad campaign.
CTG modernised its digital infrastructure by integrating the cdf data center, standardising data management and optimising supply chain systems.
Fan concluded: “Looking ahead to 2025, we foresee a landscape where challenges and opportunities coexist. We will firmly centre our efforts around the principles of ‘Insight, Leadership, Reformation, and Cohesion’, anchoring our course amid uncertainties and forging resilience through challenges.” ✈
