Offshore duty-free shopping thrives in Hainan

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.

A sales assistant packs purchased products at a duty-free shop in Haikou, capital of south China's Hainan Province Jan. 7, 2021. (Xinhua/Guo Cheng)

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 upwards 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.