MCM Opens First Free-Standing Duty-Free In Chongqing

Luxury Leathergoods Brand Follows Opening Of Three On The Bund Location In Shanghai And Beijing Peninsula Hotel Location.

MCM's Chongqing duty free is its first free-standing duty-free location in China

MCM's Chongqing duty free is its first free-standing duty-free location in China

Jing Daily has kept a close eye on the gradual march of global luxury brands from China’s prosperous east coast into its vast inland regions. Particularly over the last year, a growing number of companies have taken the plunge into second- and third-tier markets, with Bottega Veneta opening its first second-tier boutique in Nanjing and Gucci recently announcing plans to add well over a dozen new second- and third-tier city locations to their existing stores in smaller cities like Changchun, Wuhan and Shijiazhuang.

Along with expansion into these “blank slate” cities, duty-free shops have been something of a goldmine for several luxury brands in China — and outside of China as well. Duty-free shops that carry major luxury brands have been on the itineraries of mainland Chinese visitors to Hong Kong and Macau for years, and in popular outbound tourist destinations like France, last year Chinese shoppers spent US$222.5 million (more than 1.5 billion yuan) at duty-free shops, a rise of 47% over the previous year. Lately, however, the trend for duty-free appears to be targeting Chinese shoppers a little closer to home.

This year, construction is scheduled to begin on the world’s largest duty-free emporium, which is due to open doors in Haitang Bay, Sanya in Hainan province in 2012. On a somewhat smaller scale, companies like the luxury leathergoods company MCM (Mode Creation Munich) have begun to open duty-free boutiques in emerging cities like Chongqing, where last week MCM held a soft opening of its first free-standing duty-free location in China. MCM’s duty-free store joins the company’s three other China locations in Beijing and Shanghai, with the Beijing flagship store (at the Peninsula Hotel) sharing space with brands like Chanel, Hermes, Harry Winston and Bvlgari.

The 69 sq.m boutique is located alongside brands like Chanel, Versace, and Prada

The 69 sq.m boutique is located alongside brands like Chanel, Versace, and Prada

According to MCM Global Travel Retail Director Gerry Munday, the choice to open MCM’s first free-standing duty-free boutique in a second-tier city like Chongqing wasn’t as difficult as some might think, as it is just one part of the company’s plan to open dozens of new stores throughout the country in the next two years. As Jing Daily has written before, we can expect to see companies speeding up their inland expansion plans in line with what MCM is doing, as middle- and upper-middle class luxury consumers in cities like Chongqing are more likely than their counterparts in Guangzhou or Shanghai to purchase luxury goods locally, rather than jetting off to Hong Kong or Macau for shopping runs.

Speaking to reporters last week, Munday said:

“MCM as a brand is growing strongly in China with sales increasing season on season, which is very encouraging. This new downtown boutique presents us with a fabulous opportunity to further promote the brand in the region and we are delighted with the smooth running set-up and support that we have been given.

“We are expecting to open further travel retail locations in China this year and, on the domestic market, we expect to add another 35 locations by the end of 2011.”

MCM’s Chongqing location, which will have its grand opening later this month, is located in the Chongqing Duty Free Galleria, which aside from MCM offers bands like Gucci, Prada, Versace, Fissler and WMH.