Hainan reaches nearly 100 billion yuan in duty-free sales

Customers visit Sanya Hailyu Duty-Free City on its opening day in Sanya, Hainan province, on Dec 30 last year. Three duty-free shopping centers in Sanya opened on that day. [Photo/China News Service]

Hainan has sold about 98 billion yuan of duty-free goods in the past 10 years, with more than 25 million people shopping and about 120 million pieces of items sold, according to a news conference marking the 10th anniversary of the implementation of offshore duty-free shopping in South China's Hainan province.

Introduced in Hainan on April 20, 2011 to boost development of Hainan Island as an international tourist destination, the offshore duty-free policy has been continuously adjusted and upgraded regarding per capital duty-free shopping quotas, number of shopping items and times, and ranges of commodity varieties for the benefits and convenience of tourists, officials said at the meeting.

The latest move was made on July 1, which increased the annual tax-free shopping quota per person from 30,000 yuan to 100,000 yuan and has turned the island into a duty-free shopping hub, as the nation vowed to build the tropical island into an international tourism consumption center.

"Starting from scratch, the offshore duty-free shopping business is growing rapidly in Hainan. The local customs supervision now covers all links —imports of duty-free goods, their stocking, marketing and delivery to the customers. Risk control and product inspection is being strengthened to ensure all duty-free goods are safe and genuine," said Huang Tingting, head of the supervision department with Haikou Customs.

Huang said Haikou Customs has cracked down on 79 smuggling gangs in the past two years, involving 250 million yuan in total value, and enforced tighter controls over the grey market driven by daigou, professional shoppers who buy duty-free goods from shops in Hainan on behalf of customers in other parts of the country. More than 8,000 individuals who were found to have engaged in illegal daigou in Hainan have been punished since July, and they were not allowed to enjoy the duty-free shopping policy in Hainan for three years.

Offshore duty-free sales in Hainan, known as China's Hawaii, are expected to reach 60 billion yuan in 2021, doubling the annual record for the second year in a row, as fine-tuned favorable policies continue to draw more consumers, said provincial governor Feng Fei.

Supported by comparatively fast economic recovery and continuing preferential policies, the tropical resort island has become a rare bright spot in the global luxury market, which has been hit hard by the coronavirus pandemic, experts said.

Analysts with Bain & Company said even when Chinese shoppers can travel again, they will continue to buy at home as brands are investing in more stores in China and expanding their e-commerce offerings.

A new event, the first China International Consumer Products Expo, to be held in capital Haikou from May 7 to 10, is expected to spur new optimism among overseas brand producers. A total of 1,193 brands from 648 overseas exhibitors will showcase their top-notch items at the expo — including fashion, jewelry, and supplements,— which is set to be one of China's top-four national exhibition events, according to the provincial government.