Duty-free shopping booms on China’s resort island

China’s island province of Hainan has become a hot destination for tourists across the country during the National Day holiday. They are swarming to the island not just for the sunshine and beaches but also for the duty-free shopping.

Inside a duty-free shopping mall in the resort city of Sanya, Shao Kehui, a tourist from east China’s Zhejiang Province, lined up for more than 20 minutes before entering the Gucci store for a bag worth about 14,000 yuan (about 2,062 U.S. dollars).

“Due to the pandemic, we cannot go abroad, but it’s a good choice to travel in Hainan and enjoy duty-free shopping here,” said Shao, adding that it is more convenient and cheaper to travel in Hainan than going abroad. She also planned to buy some cosmetics and skincare products.

Starting July 1, Hainan has increased its annual tax-free shopping quota from 30,000 yuan to 100,000 yuan per person. The categories of duty-free goods have been expanded from 38 to 45, with electronic products such as mobile phones and laptops added to the duty-free list.

The previous tax-free limit of 8,000 yuan for a single product has been lifted, and the number of categories with a single-purchase quantity limit has been significantly reduced. The duty-free purchase limit for cosmetics has also been raised from 12 items to 30.

The perfume and makeup area of the duty-free shopping mall was quite crowded. Yang Yi, a tourist from Shanghai, picked a dozen skincare products at a counter. “There are plenty of brands, and the prices are also favorable,” said Yang, noting that she could buy more products under the new policy.

According to a sample survey conducted by Sanya’s tourism authorities, 80 percent of the tourists in the city prefer duty-free shopping after the adjustment of the duty-free shopping policy, which has made the duty-free store a popular tourist destination.

Official data shows the duty-free sales in Hainan topped 8.6 billion yuan from July 1 to Sept. 30, an increase of 227.5 percent year on year, with the sales of cosmetics landing on top. About 1.29 million customers purchased the duty-free products during the period, up 62 percent year on year.

Four offshore duty-free shops are currently in operation in Hainan, with two in Haikou, one in Qionghai and one in Sanya. The duty-free shop in Sanya is the largest one, covering about 120,000 square meters.

In a bid to improve the duty-free operation, the provincial government has recently approved two local enterprises to conduct offshore duty-free business.

Meanwhile, Hainan is expected to build three more duty-free shops in Sanya this year. To encourage moderate competition, the government will introduce an enterprise with duty-free business qualifications from other provinces to operate the business.

“Chinese people have great potential in consumption, “said Liu Feng, director of the Research Center for Free Trade Port with Chinese Characteristics of Hainan Normal University, noting that with more competitions introduced in the market, Hainan’s duty-free shopping will provide more and better choices for consumers.

China released a master plan on June 1 for the Hainan free trade port, aiming to build the province into a globally-influential high-level free trade port by the middle of the century. 

Source：xinhua