Beijing Duty Free Stores (BDFS) is a state-owned retailer that is the officially authorized duty-free outlet for China. The chain operates stores in five cities across China. Although small, the chain is prominent. Chinese consumers tend to be highly cynical: counterfeits abound, and doubts about the genuine origin of products labeled as ‘imports’ abound.
Additionally, consumers tend to be suspicious of products made overseas specifically for Chinese markets, suspecting that any products manufactured specifically for China may be of lower quality than the domestic version. As a result, DFS tends to be more popular as the products, nominally only for sale to diplomats and similarly accredited foreigners, are guaranteed not only to be imports, but to be identical to those on sale at home. Purchases are often given as gifts.
ATO first met with Beijing Duty Free Stores in April, 2013, having encountered them at an ATO CSSF-funded activity with another retail chain. BDFS admitted to having little knowledge of what products were available from the U.S., let alone which ones would sell well in their stores. Over the course of several meetings, ATO helped BDFS understand U.S. products and supply channels, putting them in contact with a number of U.S. consolidators. This resulted in an initial sale of a consolidated container of packaged foods worth $50,000 by consolidator Paramount.
Emphasis was on healthy snacks (esp. including dried fruit and nuts) and drinks, consistent with the general food trends among high-income Chinese households. The shipment was Paramount’s first direct to North China, as previous orders had typically shipped through Shanghai. Further orders will depend on sales. Followup meetings with BDFS indicate that potential sales may be greater than initially anticipated, as the Beijing operation acts as a distribution center for DFS stores in at least five cities across China.
