Chinese investor joins Vietnamese partner to launch 3 duty-free shops in Vietnam
Chinese investor joins Vietnamese partner to launch 3 duty-free shops in Vietnam
Three duty-free shops are set to open soon in Ho Chi Minh City, Quang Ninh Province, and Khanh Hoa Province, which is expected to draw in approximately 25 million Chinese visitors to Vietnam each year, as per a recent deal between China Duty Free Group (CDFG) and Vietnam’s Imex Pan Pacific Group (IPPG).
A group of Chinese tourists pose for a photo in front of Ben Thanh Market, one of the landmarks in Ho Chi Minh City, Vietnam’s southern economic hub. Photo: Quang Dinh / Tuoi Tre |
During a four-day working visit to Vietnam, starting on Wednesday, a delegation from China Tourism Group (CTG) and its subsidiary CDFG signed a memorandum of understanding (MoU) with IPPG, a Vietnamese conglomerate operating in six different industries including luxury retail, regarding the opening of these duty-free shops.
CTG is the largest central state-owned tourism enterprise in China while CDFG is the largest duty-free business group in the country.
Last year, CDFG achieved remarkable business results, with its revenue reaching US$9.3 billion, marking a significant increase of 24.1 percent from 2022, Hai Quan (Customs) Online magazine reported, citing Johnathan Hanh Nguyen, president of IPPG, which is based in Ho Chi Minh City.
Its net profit amounted to $939.4 million, reflecting a year-on-year growth rate of 24 percent.
Pursuant to the MoU, the first duty-free shop, named Bac Luan 1, will be opened in the Mong Cai border gate area in nothern Quang Ninh Province this year.
Two other downtown duty-free stores are set to debut in Nha Trang City of south-central Khanh Hoa Province in early 2025 and in District 1 of Ho Chi Minh City whose opening date has yet to be announced.
According to tourism businesses, the downtown duty-free shop model has thrived in many large cities around the world, including Seoul, where such shops earn $16 billion every year.
IPPG and CDFG have agreed on the criteria for setting up and running the three future duty-free shops, said Nguyen.
The cooperation between the two groups will create a breakthrough in tourism revenue growth for Vietnam, as these shops, upon operation, are expected to attract a total of 25 million visitors from China every year, the Vietnam News Agency cited Nguyen as saying.
These travelers are all high spenders so their arrival will contribute to Vietnam attracting a growing number of high-end tourists from China., he added.
The average spending by a Chinese traveler while on a foreign vacation is about $1,000 per day, exclusive of accommodation, aaccording to a report by hotels.com.
Of the amount, 57.76 percent is spent on shopping, especially high-end products for themselves or as gifts.
Before the COVID-19 pandemic, China was the largest provider of travelers to Vietnam, accounting for 30 percent of the international visitors to Vietnam, according to the Vietnam National Authority of Tourism (VNAT).
After China officially reopened international tourism in January 2023, the number of Chinese tourists coming to Vietnam reached about 1.8 million that year, ranking second among 12.6 million foreign travelers the Southeast Asian country, the VNAT reported.
Nguyen Trung Khanh, director of the VNAT, remarked that the collaboration between IPPG and CDFG will present significant opportunities for the advancement of Vietnam's tourism industry.
With sufficient investment and effective operations, these duty-free stores will help promote tourism, bringing in foreign currency and generating jobs, he said.
Vietnam has set a target of welcoming 18 million international visitors and 110 million domestic tourists in 2024, earning a total revenue of about VND850 trillion ($34.25 billion), according to the VNAT.
