Government News
China’s CDF, Switzerland's Avolta win duty-free concession for Shanghai airports 2025-12-21
State-owned China Duty Free Group and Dufry Shanghai Commercial, the Chinese unit of Swiss travel retail giant Avolta, will replace Sunrise Duty Free Shanghai as the new operators of duty-free shops at Shanghai's two international airports.
CDF will run duty-free stores at Shanghai Pudong International Airport's Terminal 2 and satellite hall and Shanghai Hongqiao International Airport's Terminal 1, while Dufry will manage duty-free stores at Pudong Airport's Terminal 1 and satellite hall, Shanghai International Airport announced on Dec. 17.
The eight-year contracts, effective from Jan. 1, will expand the duty-free retail area by 1,564 square meters and widen the product range to include phones, drones, mother-and-baby goods, and health foods. They also require the introduction of time-honored Chinese brands and products linked to intangible cultural heritage.
Dufry will pay Shanghai International Airport, which operates the two airports, a fixed monthly rent of CNY3,141 (USD445) per sqm for Pudong Airport’s Terminal 1. CDF will pay CNY3,090 per sqm per month for Pudong Airport’s Terminal 2 and CNY2,827 per sqm for Hongqiao Airport’s Terminal 1.
Sales commission rates range from 8 percent to 24 percent at Pudong and from 8 percent to 22 percent at Hongqiao. Before the Covid-19 pandemic, contracted commission rates agreed with Sunrise Duty Free reached as high as 42.5 percent.
Shanghai International Airport also said it will set up joint ventures with both CDF and Dufry to operate the duty-free stores, in which it will have 49 percent stakes.
“The competitive landscape in the duty-free market is changing,” an insider at Shanghai International Airport told Yicai. “The company is shifting its strategy by sharply cutting commission rates to give operators room to grow sales, using JVs to achieve a win-win outcome.”
Sunrise Duty Free, in which CDF has a 51 percent stake, was excluded from the bidding after four CDF-appointed directors voted against its participation at a board meeting on Dec. 6.
CDF previously operated offshore duty-free stores in Hainan province, while Sunrise Duty Free focused on duty-free operations at Shanghai airports and at Beijing Capital International Airport's Terminal 3.
Beijing Capital Airport has also launched a new round of bidding for duty-free franchise rights at Terminals 2 and 3 for nearly eight years, with bids due today. CDF operates Terminal 2, while Sunrise Duty Free runs Terminal 3.
Source: Yicai Global
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