Dufry, the leading global travel retailer operating over 2,400 duty-free and duty-paid shops in airports, cruise lines, seaports, railway stations and downtown tourist areas, has agreed to form a Joint Venture with Alibaba Group to partner in the Chinese travel retail markets.
Alibaba Group and Dufry AG (Dufry) enter into a collaboration to jointly explore and invest in opportunities in China to develop the travel retail business and to enhance Dufry’s digital transformation. The parties will incorporate a Joint Venture (JV) owned 51% by Alibaba Group and 49% by Dufry. Alibaba will bring in its established network in China and its digital capabilities. Dufry will contribute to the JV its existing travel retail business in China, and will support the JV with its supply chain and strong operational skills.
Julian Diaz, Dufry Group CEO, commented, “We highly value this partnership with Alibaba Group to form a strategic Joint Venture to explore growth opportunities and develop the travel retail business in China. We expect this collaboration to drive growth in Asia and with Chinese customers worldwide with the support of new digital technologies. Alibaba Group is a leader in digital commerce with an ecosystem of more than 800 million consumers in China. Dufry holds a leading position in travel retail globally and brings in its strong operational expertise in 65 countries and over 2,500 shops. By fostering existing and new business models in offline and online travel retail, we are convinced the Joint Venture will capitalize on growth opportunities and will support Dufry to become the leading digital travel retail company worldwide. We aim to better serve our customers and provide them anywhere with global products, services and personalized offers across all platforms and devices.”
In connection with this collaboration, Alibaba Group will invest in Dufry up to a maximum of 9.99% of the post-offering share capital and will participate in its ordinary capital increase which is subject to approval of Dufry’s shareholders at its upcoming Extraordinary General Meeting EGM on 6 October 2020.
With the additional commitment by Alibaba Group, Dufry proposes to the EGM the issuance of up to 25 million fully paid-in registered shares, which would result in potential gross proceeds of approximately CHF 700 million.
The partnership with Alibaba Group is in line with Dufry’s growth strategy focusing on the Asian markets and builds on the company’s existing and long-dated footprint in China. Dufry first started to operate travel retail businesses in China in 2008. Today, Dufry manages duty-paid shops in the Shanghai and Chengdu Airports, and its presence extends to Hong Kong and Macau. Dufry is also seeking to expand its 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.