CHINA. Chinese listed conglomerate Gree Real Estate has announced that it will acquire 100% of Zhuhai Duty Free, one of the country’s state-owned travel retailers. The news was reported first by Jason Cao’s Duty Free Expert, The Moodie Davitt Report’s close colleague in China.
Gree Real Estate is an enterprise that combines real estate, port and marine business, services and finance. Its major shareholder (41.11%) is Zhuhai Investment Holdings Company, a subsidiary of the state-owned Assets Supervision and Administration Commission.
The Assets Supervision and Administration Commission of the Zhuhai Municipal People ’s Government owns 77% of Zhuhai Duty Free shares, and Zhuhai City Construction Group Co. holds the remaining 23%.
Duty Free Expert (DFE) highlighted the common local government shareholding of Gree Real Estate and Zhuhai Duty Free as a factor behind the acquisition. It commented: “DFE believes that Zhuhai Duty Free will become a new variable worthy of high attention in China’s duty free industry. Against the background of [new] duty free policy, Zhuhai Duty Free will become an important force in all sectors like downtown duty free shops, airport departures and arrivals duty free, offshore duty free and cross-border e-commerce.”
It added: “Zhuhai Duty Free has obtained the qualification for cross-regional operation, operates all categories and is expected to participate in all regions in China. Everybody can see that the Spring of China’s duty free industry is coming.”
Citing a report from investment advisor Everbright Securities, DFE noted that Zhuhai Duty Free had forecast sales (pre-COVID-19) of around CNY4 billion (US$564 million) for 2020. It delivered a record first half of 2019, according to the analyst.
Zhuhai Duty Free’s flagship store is located at Gongbei, the entry point between Zhuhai and Macau, with annual turnover of around US$300 million from a passenger base of over 130 million a year. Its most recent project was the opening of a departures shop in the Zhuhai to Hong Kong waiting hall of the Hong Kong-Zhuhai-Macao Bridge, which opened in October 2018. A further phase of that project (with two further stores) is planned.
As it opened the bridge project, the retailer told The Moodie Davitt Report that it was committed to raising the standard of its retail offer and environments, with a strong focus on beauty and fashion complementing its traditional strengths in liquor & tobacco. It hailed the development of the new bridge stores as its “big strategic change”.
