Dufry Teams up with Alibaba

On 5^th October, the news of a Joint Venture between Dufry and the Digital and e-commerce powerhouse Alibaba Group for the Chinese travel retail market resonated across our industry – and beyond. This announcement heralds a collaboration to jointly explore and invest in opportunities in China to develop the travel retail business and to enhance Dufry’s digital transformation and it is structured in the form a Joint Venture – which is the legal vehicle to articulate the collaboration of the two companies for this particular enterprise.

Through this collaboration, Alibaba will bring in its established network in China and its digital capabilities, while Dufry will contribute its existing travel retail business in China, and will support the joint venture with its supply chain and strong operational skills. But what are each of these two players aiming to achieve with this collaboration?

Dufry: Expand Digital Capabilities and Sales

The Alibaba partnership could catalyze Dufry´s footprint expansion in the Chinese market, where we’ve operated since 2008 with duty-paid shops in Shanghai and Chengdu airports and with a duty-free presence in Hong Kong and Macau. The partnership with Alibaba could however open the door to duty-free sales in the ever-attractive market of mainland China.

More importantly, this partnership will help to expand Dufry´s digital offerings including store and staff digitalization, pre- and post-travel online services, digital customer engagement and online presence inside and outside of the airport, as well as data analytics and digitalization of operations. Alibaba’s various digital platforms, ranging from e-commerce to digital payments (such as Alipay - which should also help Dufry’s physical stores, as air travel slowly recovers), feature an enviable base of more than 800 million consumers in China alone.

Alibaba: Exclusive Products for their Client Base

Regulations in the Chinese duty-free market have recently been relaxed on an unprecedented scale, including the tripling of purchase quotas in some provinces. This recent decision by the Chinese government could eventually quadruple the market in the next three years according to analysts’ expectations. With an agreement with Dufry, and access to both Dufry´s operational skills and supply chain capacity as well as access to top-class luxury goods, Alibaba will be in an unrivalled position to serve this enlarged market and have a significant advantage over its competitors.  

The industry is setting high expectations on this agreement – and so are we – and we’re all excited to see how this collaboration evolves. Stay tuned!