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Airport retail is potential 'gold mine'
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The country's airport retail sector is expected to experience "eruptive growth" in the next three to seven years, officials said.


"China's airport retail business is a gold mine waiting to be explored," Liu Shaocheng, policy department director of the General Administration of Civil Aviation, told the China Airport Retail Summit 2007 in Beijing yesterday.


He cited official statistics saying the total revenue of all China's airports last year was 22.85 billion yuan ($3.08 billion), but less than 40 percent came from the non-aviation sector.


In foreign airports, the figure is usually more than 50 percent and can be as high as 75 percent, he said. Moreover, annual retail revenue, at about 3 billion yuan, accounts for just one-third of the total from the non-aviation sector, Liu said.


"This is much less than at airports in Europe, Australia and the rest of Asia, which means the commercial potential of Chinese airports has not been developed fully," he said.


Cai Chaolin, deputy general manager of Guangzhou Baiyun International Airport Co Ltd, said most mainland airports are State-owned and in the past have neglected retail opportunities and concentrated solely on operational safety.


However, in recent years, more and more of them have recognized the revenue potential and are changing the way they think, he said.


Several major airports in Beijing, Shanghai and Guangzhou, have already begun restructuring their retail sectors, he said.


They have adopted similar strategies - expanding commercial areas, cutting the cost of travelers' necessities and introducing high-end consumer products.


"Setting price limits for necessities such as food and drink is essential because it presents a good image and increases travelers' satisfaction levels," Cai said.


For many years, airports were criticized for charging as much as 40 yuan for a cup of tea or 30 yuan for a bowl of noodles, far higher than the prices of equivalent items downtown, he said.


Qian Liqin, chairman of the Capital Airport Commercial & Trading Co, admitted the previous commercial structure, which offered neither cheap food for economy travelers nor haute cuisine for business travelers, was not working.


So in September, the airport began cutting prices.


The results have been positive, Qian said.


Retail revenue in October was twice what it was in the previous month, he said.


(China Daily November 22, 2007)


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