Chinese invest in duty free stores

PHNOM PENH China Duty Free Group plans to open two duty-free stores in downtown Siem Reap and Phnom Penh.
The plan is part of the retailer’s first offshore expansion, beyond enterprises in mainland China.
The CDFG-Cambodia general maneger, John Zhao, told local media that the company is planning to invest USD35 million to set up two stores, one in Siem Reap by the end of the year and another located in Phnom Penh by the second half of 2015.
“Tourist arrivals increase, however, there is no international space for shopping in Cambodia. We are the first downtown duty-free shop to gain official approval to open here.”
Cambodia was selected because of its growing tourism industry, which is increasing at about 15% annually, he said.
“Around 45 million Chinese tourists visit Hong Kong every year just for shopping. Chinese tourists like to spend money on buying luxury brands. Cambodia receives around 5 million tourists every year and almost 500,000 of those are Chinese,” he added.
Construction has commenced on the Siem Reap store, which will have four levels and 4,500 square metres of retail space, in July and is expected to open officially in December.
The company is currently studying locations for the second Phnom Penh store, he added.
CDFG, established in 1984, is the only state-owned enterprise authorised by China’s government to operate duty free businesses in China.
Cambodian Association of Travel Agents president, Ang Kim Eang, hoped CDFG’s arrival would prompt more duty free retail operators to venture into Cambodia.
“It benefits the tourism industry as it will attract more tourists who like to shop for luxury brands and Cambodia can be another shopping destination like Malaysia,” he said.
However, it will also ensure that a Chinese company is benefiting from what will mainly be Chinese travellers buying imported luxury items in Cambodia. The bottom-line benefit for Cambodia’s retail industry may be not be so significant if the shops major only on imported goods without giving space to local manufactured items.
Supporters will point out the shops will pay tax, rent space and hire staff, all substantial cost items that will provide earnings for the local economy.

sourced:ttrweekly.com