Beijing-based department store operator Wangfujing Group, which last month was granted a licence to sell duty free goods by the Ministry of Finance, announced the creation of a wholly owned subsidiary duty free company.
SEE ALSO : Wangfujing acquires duty free license
Beijing Wangfujing Duty Free Management Co Ltd will have registered capital of US$72 million.
The new company’s business scope includes operating duty free stores and selling a range of related duty free and tax free goods.
The new company is likely to focus on opportunities both within the Mainland and in Hainan province, where the recently liberalised offshore duty free shopping policy encourages additional competition to market leader China Duty Free Group.
Wangfujing Group commented: “In recent years, with the continuous development of China’s market economy and the further liberalisation of tax exemption policies, China’s duty free market has great potential for development. The company’s investment in the establishment of a duty free goods management company is in line with our strategy. The development direction is conducive to expanding the company’s main business scope and… will help the transformation of our existing retail business.”
Noting certain capital risks, and its status as a new entrant in the highly competitive duty free market, Wangfujing said: “The company will actively study policies related to the duty free business, accelerate the formation of a professional management team, and give full play to the [new] company.
“The advantages of our existing resources promote the implementation of related businesses as soon as possible… [we will] try to shorten the cultivation period of the new business as much as possible,” Wangfujing added.
(Source: Moodie Davitt Report)