Guangzhou Baiyun Airport will be transformed into a luxury shopping mall? Start with the introduction of Louis Vuitton

Reporter | Wu Rong

Edit | Xu Yue

According to the Tianyancha APP, the luxury brand Louis Vuitton will open a store at Guangzhou Baiyun Airport, and officially registered the relevant company on December 15, the company name is "Louis Vuitton (China) Commercial Sales Co., Ltd. Guangzhou Baiyun International Airport Store", the registered address shows that the store is located on the second floor of the West Corridor of Terminal 2.

Louis Vuitton confirmed this fact to Interface News, saying that the store is expected to officially welcome customers next year, but the specific time has not been disclosed.

Image source: Sky Eye Check

In recent years, luxury brands have increased the scale of opening airport stores in domestic airports, and the newly put into use beijing Daxing airport and Chengdu Tianfu airport have gathered brands such as Louis Vuitton, Gucci and Hermès. According to the announcement of Guangdong Airport Management Group, in October this year, Louis Vuitton won the bid for a taxed business in Baiyun Airport Terminal 2.

This winning bid also indicates that Louis Vuitton will become the first luxury brand introduced by Baiyun Airport. As for which luxury brands will also be stationed at Baiyun Airport, Baiyun Airport spokesman Qi Yaoming told Interface News: "We are actively striving for it. International luxury brands operate under confidentiality clauses. ”

According to the prediction of Zheshang Securities's "Airport Taxed Business Special Report" in October this year, the number of luxury brands expected to be introduced by Baiyun Airport is about 10.

This round of high-end brand introduction plan also marks that the commercial operation of Baiyun Airport will enter a new stage of development.

Airport revenue is divided into aviation income and non-aviation income, of which non-aviation income includes franchising, commercial retail, catering, advertising and leasing, etc., which have high gross profit margins and have more development potential than aviation revenues that are limited by government control.

According to the financial report, before the epidemic, that is, in 2019, the non-aeronautical revenue of Capital Airport and Shanghai Airport accounted for 62% and 63% of the total revenue, but the non-aviation revenue of Baiyun Airport accounted for 53%.

Baiyun Airport is not unaware of this. In 2019, Baiyun Airport's T2 Terminal increased the area of inbound and outbound duty-free shops, adding a total area of 3.6 times the original area. According to public data, in the first half of 2019, the sales of the company in the Baiyun Airport Duty Free Shop reached 844 million yuan, an increase of 556 million yuan year-on-year, an increase of 193%.

However, under the impact of the new crown epidemic, the business of inbound and outbound duty-free shops has been hit hard, while on the other hand, the high-end degree of taxed commercial settlement brands at Baiyun Airport is insufficient.

Taking Terminal 2 as an example, the terminal was fully put into use in May 2018, with about 250 shops, in addition to duty-free shops, most of them are catering, leisure food, convenience stores, clothing, pharmacies, handicrafts and other formats, lack of high-end brands.

Fortunately, compared with the proportion of retail commercial leased area of other airports in China, the hardware base performance of Baiyun Airport is relatively sufficient. According to the data, after excluding the duty-free area, the retail commercial leased area of Baiyun Airport is 53,000 square meters respectively. According to the calculation of 10%-30% of the taxed high-end retail commercial area (the remaining is catering, specialties, bookstores, experience areas, etc.), the maximum area that Baiyun Airport can use to lay out taxable high-end retail is about 16,000 square meters.

Airports are a gathering place for mid-to-high-end consumers, and waiting in a limited space is more likely to make consumers feel impulsive shopping. In recent years, the market share of luxury airport channels has increased. According to a report released by Bain & Company, although the airport stores of luxury brands accounted for only 6% of the overall channel market share in 2018-2019, their growth rate was 11%, which was stronger than that of department stores and specialty stores that accounted for the main part of the channel. The introduction of luxury brands will bring greater impetus to the performance of Baiyun Airport.

Zheshang Securities Research Report predicts that considering the high-end commercial layout of Baiyun Airport has just started, it is expected that the early commission rate of the airport will be 10%-20%, contributing about 1-200 million yuan in profits per year (in 2019, baiyun airport net profit attributable to the mother is 1 billion yuan). As the commercial layout of the airport continues to unfold, it can also inject more vitality into the commercial market of Guangzhou and even the Greater Bay Area.