Shanghai Duty-Free Battle Pits State Giant Against Foreign Partner
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A boardroom battle at Sunrise Duty Free Shanghai Co. Ltd., a pioneer of China's airport retail sector, has left the company on the verge of losing its core business — an outcome that could tilt the balance of power in China's booming duty-free industry toward state-owned giants.
Sunrise, which currently holds the duty-free concessions at Shanghai’s Pudong and Hongqiao international airports, has been effectively barred from renewing its contract. The company’s controlling shareholder, China Tourism Group Duty Free Corp. (CTG), has blocked Sunrise from bidding on the lucrative 2026–2033 airport concessions, according to people familiar with the matter.
The internal standoff escalated at a Dec. 6 board meeting, where CTG Chairman Wang Yanguang and three other CTG-appointed directors voted against participating in the tender. Without their approval, Sunrise cannot file a valid bid, leaving CTG in prime position to take over the business itself. The bidding process closes at 9:30 a.m. on Dec. 9.
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- Sunrise Duty Free faces exclusion from renewing key Shanghai airport concessions, as controlling shareholder CTG blocks its bid for 2026–2033, favoring potential direct CTG control.
- The conflict stems from CTG's stance against foreign partners, threatening minority shareholder interests, with Sunrise considering legal action.
- CTG’s Hainan revenues declined 16% in 2024, while Shanghai’s share of CTG’s revenue rose from 18% (2021) to 28% (2024), emphasizing Shanghai’s strategic importance.
- Sunrise Duty Free Shanghai Co. Ltd.
- Sunrise Duty Free Shanghai Co. Ltd., a pioneer in China’s airport retail sector since 1999, is facing potential exclusion from renewing its duty-free concessions at Shanghai's Pudong and Hongqiao international airports. The company, a joint venture where China Tourism Group Duty Free Corp. (CTG) holds a 51% stake, is being blocked from bidding by CTG, which reportedly aims to take over the lucrative business itself, citing an unofficial policy against foreign partners in duty-free operations.
- China Tourism Group Duty Free Corp.
- China Tourism Group Duty Free Corp. (CTG) is the controlling shareholder of Sunrise Duty Free Shanghai Co. Ltd., holding a 51% stake. CTG has intentionally blocked Sunrise from bidding on lucrative airport concessions, leveraging its board control. This strategic move aims to consolidate power in China's duty-free industry, potentially taking over Sunrise's operations at Shanghai's airports, especially given CTG's recent struggles in other markets like Hainan.
- Citic Group Corp. Ltd.
- 中國中信集团有限公司 (Citic Group Corp. Ltd.) retained a 33.32% stake in Sunrise Duty Free Shanghai Co. Ltd. following a 2018 restructuring. This occurred when China Tourism Group Duty Free Corp. (CTG) acquired a 51% controlling stake in Sunrise. Citic Group is therefore a minority shareholder in Sunrise.
- Shanghai Airport (Group) Co. Ltd.
- Shanghai Airport (Group) Co. Ltd. holds a 15.68% stake in Sunrise Duty Free Shanghai Co. Ltd. This makes it a minority shareholder in the company, which also acts as the landlord for the airport concessions. The ongoing boardroom battle at Sunrise could negatively impact Shanghai Airport Group's interests.
- 1999：
- Sunrise Duty Free Shanghai Co. Ltd. was founded with foreign investment to secure Shanghai Pudong Airport’s duty-free license.
- 2005：
- Sunrise expanded to Beijing Capital Airport.
- 2011：
- China Tourism Group Duty Free Corp. (CTG) pivoted to retail following the Hainan duty-free policy.
- By 2017：
- Sunrise and CTG were competing for Shanghai’s concessions.
- 2018：
- Sunrise was restructured and CTG acquired a 51% controlling stake.
- 2021：
- Hainan’s share of CTG's total revenue was 70%.
- 2023：
- Sunrise paid 1.83 billion yuan in rent and commissions to Pudong Airport, a record year.
- 2024：
- CTG’s revenue from its offshore business in Hainan was down 16%, and Hainan sales dropped nearly 30%. Hainan’s share of CTG revenue dropped to 51%. Shanghai contributed 28% of CTG’s revenue, up from 18% in 2021.
- First three quarters of 2025：
- CTG's revenue fell 7.3%, and net profit slid 22.1%.
- As of Dec. 6, 2025：
- At a board meeting, CTG’s Chairman and directors voted against Sunrise participating in the tender for 2026–2033 airport concessions.
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