Retail in Asia

Travel Retail

Dashang Co applies for a duty free licence


Dalian-based retail company Dashang Co has become the latest local market player to apply for a duty free licence as interest in China’s burgeoning duty free channel surges.

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Dashang owns and operates department stores, shopping centres, supermarkets, an electronics and home appliance retail chain, and food and entertainment businesses.

In a disclosure Dashang Co said that together with controlling shareholder, Dashang Group, it had submitted a request to support the licence application to relevant authorities at Liaoning Province and Dalian Municipal Government. However, the company warned that the preparatory work is still in the early stages and that there is no guarantee of success.

“Duty free business qualifications are franchising qualifications, and there is a major uncertainty as to whether the company will eventually obtain this qualification,” Dashang said.

An experienced observer of the Chinese duty free market told The Moodie Davitt Report such applications should be treated with caution. “The biggest department stores in first tier and second tier cities all want to play this game and it is a way to raise their stock price,” he said.

Guangzhou-based publicly listed tourism services provider Lingnan Holdings confirmed that its parent, Lingnan Group, has also applied for a duty free licence. The disclosure came in a stock exchange announcement after the company’s share price rose above +20% on both 14th and 15th July. The company cautioned, however, that the application was work in progress and its chances of success uncertain.

Lingnan Group is part of the Guangzhou State-owned Assets Supervision and Administration Commission.

Wuhan-based department store company Wuhan Wushang Group Co (listed as E Wushang A) issued a similar disclosure on 15th July in response to abnormal fluctuations in stock trading between 13th and 15th July.

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“The company has submitted an application for the qualification of duty free goods management to the relevant government departments, but the work is still in progress,” reported.