Less to do at duty-free shops

Updated: 2015-11-24 11:37

By Lia Zhu in San Francisco(China Daily USA)

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The image of Chinese tourists as big spenders is somewhat fading, if you go by the observations of sales staff at duty-free stores at San Francisco International Airport.

"They usually spent generously on luxury items without even thinking about the price," said Christine, a salesclerk, who gave only her first name. "But now they tend to be hesitant and match prices before paying money."

She is the only attendant at a store run by DFS Group, a Hong Kong-based luxury retailer that operates duty-free stores at 18 major airports.

Despite the busy traffic at the international terminal, the store, which sells name-brand perfumes, liquor and tobacco, was pretty quiet.

"It's not unusual for a Chinese tourist to buy tens of thousands of goods here," said Christine, pointing to the glass display case of liquor. The most expensive item - Louis XIII de Remy Martin cognac - sells at $9,999 per case.

A few meters away from Christine's store is a much bigger DFS store, where five or six salesclerks were waiting for customers.

"We have had remarkably less business from Chinese tourists since this year, both in the number of customers and the money they spent," said Mandy Huang, who oversees the store.

"I think the business dropped half compared with last year," said Huang, who rotated between three DFS stores at the international terminal, adding that they were monitoring the trend, though no specific numbers could be provided.

She attributed the drop partly to competition from duty-free stores in China.

"From the photos our customers showed me, the duty-free store in Shanghai is very big," Huang said, referring to the Sunrise Duty Free store at Shanghai Pudong International Airport. The Sunrise also runs two other duty-free stores on the Chinese mainland, at Shanghai Hongqiao International Airport and Beijing Capital International Airport.

With "pre-order outbound and pick-up inbound" service, Chinese tourists can pre-order goods upon departure without paying for them and then pick them up upon return.

"They (Chinese tourists) usually produce a list of pre-orders and match prices with ours," Huang said. "Their prices are indeed competitive; even if some are a little higher than ours, they would choose to buy them back home to save trouble."

China currently has 262 duty-free stores nationwide, at locations ranging from airports to borders to cruise terminals and downtown areas.

It was reported at a State Council meeting earlier this month that the Chinese government plans to open more duty-free stores at ports of entry across the country and to import more popular consumer goods, including luxury brands and domestic products, in an effort to stimulate spending amid deflationary pressure.

But details of the plan, such as the timeframe and locations, have not been disclosed.

According to local media reports, a 3,000-square-meter duty-free store will be open in downtown Shanghai by the end of the year. Chinese citizens age 16 or older with proof of overseas trips can shop at the store within 180 days after returning from the trip.

In Guangzhou, another big duty-free store has been planned at the Nansha International Cruise Terminal complex.

The luxury goods market has benefited greatly by the growing affluence in China; in 2014, the Chinese accounted for 29 percent of the world's personal luxury goods purchases.

liazhu@chinadailyusa.com

 

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