Offshore duty-free shopping thrives in Hainan

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Offshore duty-free sales in South China’s Hainan province reached 46.8 billion yuan (about $7.2 billion) between July 1, 2020 and June 30, 2021, soaring 226 percent year-on-year, according to statistical data.

During that period, some 6.28 million customers bought products at duty-free shops while on the island province, a year-on-year increase of 102 percent.

This can be attributed to Hainan’s favorable duty-free policy. Since the implementation of a duty-free shopping policy in 2012, it has so far been updated six times. In addition to increasing the annual tax-free shopping quota in Hainan from 30,000 yuan upward to 100,000 yuan per person incrementally each year, the policy has also expanded the categories of duty-free goods from 38 to 45. The 8,000-yuan duty-free cap for a single item was also canceled. Besides, the province is now home to nine duty-free shops.

Thanks to the province’s upgraded duty-free policy, including growing categories of duty-free goods, five offshore duty-free shops under the China Duty-Free Group (CDF) raked in 32.7 billion yuan last year, making it the largest travel retail operator in the world, according to a report issued on July 5, 2021. The CDF has cooperated with over 1,000 internationally famous brands and will introduce more brands to attract customers going forward.

The Sanya International Duty-Free City, one of CDF’s shops, is the world’s largest single duty-free shop. Located in Sanya, a locale frequented as a tourist resort in the province, the shop is now home to more than 650 international brands and has become a popular attraction for tourists.

Driven by Hainan’s new duty-free policy, Wu Na and some of her friends from East China’s Shanghai flew to Haikou, capital city of the province, to hit up a duty-free store run by CDF in the Haikou Riyue Plaza on July 29.

“A classic-style Dior lipstick is priced at 220 yuan in the duty-free store, at least 130 yuan lower than that found on several leading Chinese e-commerce platforms,” Wu said, adding that she bought 3,000 yuan worth of cosmetics during her journey.

Feng Fei, governor of Hainan, said duty-free sales networks across the island will be expanded to better meet the domestic demand for imported goods, with sales of duty-free goods expected to reach 300 billion yuan over the next five years.