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Duty-Free Shopping Rockets in Hainan as New Policies Kick In

By Han Wei / Sep 07, 2020 02:25 PM / Economy

Daily sales since July 1 at one duty-free shop in Sanya, the popular coastal resort city in the southern province of Hainan, surged above 100 million yuan ($14.6 million) as travelers flocked to the island for its unique tropical scenery and greater variety of duty-free products.

Sanya’s Haitang Bay Duty Free Shop, operated by state-owned China Duty Free Group Co. Ltd., served 740,000 customers between July 1 and Aug. 18, 70% more than in the same period a year ago. They purchased 4.58 million items from fragrances to cosmetics to luxury watches and bags, 150% more than a year ago. The store set a global industry record with 5 billion yuan of sales in 49 days.

On July 1 in Hainan, a set of new policies took effect allowing visitors to purchase more duty-free products with fewer limits. Under the new rules, the quota for individuals on duty-free purchases in Hainan was tripled to 100,000 yuan a year while the duty-free product catalogue increased from 38 to 45, adding new options from mobile phones and tablets to wine. Previous limits on the number of items that could be purchased per customer were increased or eliminated. More licensed duty-free retailers are expected to open shops in Hainan under the new rules.

The revamp in Hainan’s duty-free retail sector is part of China’s strategy of transforming the island province into a regional commercial hub that could compete with Hong Kong, Paris and London. It also reflects Beijing’s efforts to bolster domestic consumption to counter economic challenges from pandemic fallout and escalating trading tensions with the United States.

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com).

Read Full Story: Cover Story: Why China Is Expanding Access to Duty-Free Shopping


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