In Markets

Shanghai Hongqiao plans major retail expansion


Shanghai Hongqiao Airport is planning to launch a large number of duty paid retail tenders in Terminal 2 and open a new international terminal next March with a much enlarged duty free offer.

The airport handled nearly 33 million passengers through Terminal 2 in 2016 (+2.6%), with two big retail concessions currently operating in this location. Dufry was originally awarded one on the south side in 2010 for a seven-year period (when T2 opened) and another 13 shops trade on the north side which are run by Shanghai-based retailer Huai-Hai.

Airport management says that due to the large number of shops involved they are going to extend some licenses from six months to two years. This will ensure that all these contracts do not expire on the same date as originally planned. The airport’s commercial department will then offer all of these shops as separate contracts, rather than within groupings.

Different bid options

Airport management in Shanghai confirmed recently that brand owners will be permitted to bid independently, or through an operator.

SEE ALSO: Hongqiao Airport gets more luxury brands

In addition, there are also a further six luxury branded duplex shops located in T2’s centrally-located Luxury Avenue where contracts also expire in September 2017. Once again, some of these will be extended so they are not all tendered together.

Shanghai Hongqiao continues to be the main domestic airport serving Shanghai, although it also has a growing Terminal 1 international passenger base serving mostly Asian business traffic to Tokyo Haneda, Seoul, Gimpo, Hong Kong, Macau, Taipei, Songshan and other regional Asian airports.

Sunrise Duty Free currently operates the duty free shops in T1, where major changes are also planned in 2017. This is against a background where sales have risen by 7% between January and October of this year, according to the airport. Terminal 1’s international passenger numbers are also expected to rise by 6% this year compared with the 2.9m total recorded in 2015.

New international terminal

A new international terminal building is also currently being constructed to replace the current T1 and this is due to open in March 2017 with a potential annual passenger handling capacity of 5m.

SEE ALSO: DJI opens second China flagship store in Shanghai

Within this facility, duty free will be totally redesigned covering 2,000sq m, or more than four times the present area and will be spread over two floors.

Due to the redesigned passenger flow through both passport control and security, all passengers will also be obliged to walk through the duty free hall which will also include duty paid shops.

Currently, perfume and cosmetics and liquor and tobacco account for the major portion of duty free sales at Hongqiao Airport and there will be two P&C shops in this new terminal.

Large new arrival shop planned

There will also be one liquor and tobacco outlet, plus three 50sq m boutiques for Hugo Boss, Montblanc and Tumi which trade at present in a mixed boutique shop.

The beauty shops will also include a number of new brands – including some Korean cosmetics lines that are popular with Chinese.

In the new terminal building, the duty free arrivals shop will also comprise 500sq m, following airport authority discussions with Sunrise Duty Free who indicated a preference to operate one large arrivals shop, rather than several smaller ones.

(Source: TR Business)

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