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CHINA/SINGAPORE. Cainiao Smart Logistics Network (Cainiao), the logistics arm of Alibaba Group Holding Limited, today confirmed plans to launch seven weekly chartered flights carrying international goods from Singapore to duty free shops in Haikou and Sanya, Hainan.

As reported, the new service is a critical boost for the business in the island province amid soaring consumer demand for duty free goods and intense pressure on the supply chain.

Cianiao will offer five weekly Haikou-Singapore direct flights and twice weekly Singapore-Sanya-Guangzhou flights.

Both routes will provide cross-border logistics services for global beauty and luxury brands to enter Hainan. They will also facilitate the export of domestic ecommerce goods to Singapore, thus enhancing trilateral trade between Singapore, Hainan and China’s Greater Bay Area.

Celebratory scenes as the new cargo route service is unveiled

By leveraging Cainiao’s advanced global supply chain capabilities and technologies, the imported goods will arrive in Hainan from Singapore within three hours. They will be ready for sale in duty free shops within 12 hours after clearing customs and being dispatched from the warehouse.

Until now it usually takes two to three days to import goods to Hainan as they have to first land in Shenzhen or Guangzhou, before being transported to Hainan via trucks and ferries, Cainiao pointed out.

Scenes like these underline the intense pressure on the supply chain in Hainan. Pictured above is Global Duty Free Plaza, whose licence holder is Hainan Development Holdings with support from Dufry. The photos below show frenzied shopping scenes from the island province’s dominant duty free location, CDF Mall in the Sanya International Duty Free Shopping Complex.

“This is our first foray into the Hainan Free Trade Zone and we have plans to launch more dedicated freight routes between Hainan and other countries to provide import and export merchants with faster, more efficient, and reliable logistics services,” said Cainiao General Manager for Global Supply Chain James Zhao.

“Hainan will be a pivotal priority for Cainiao in the coming years, and we expect to open more direct cargo routes to link Japan, South Korea, Australia, New Zealand and Europe to Hainan soon.”

The launch of chartered flights between Singapore and Hainan is designed to satisfy the booming demand for luxury brands in China, with consumption in Hainan increasing +244%[1] year-on-year for the period between 1 July 2020 and 6 April 2021.

In July 2020, the Chinese government tripled the annual limit for duty free purchases to RMB100,000 (US$15,500) per person, and removed a cap of RMB8,000 (US$1,230) for any single product as part of its Free Trade Port plan. Citing The Moodie Davitt Report, Cainiao said that in February 2021, Hainan offshore duty free sales rocketed to RMB4.79 billion (US$736 million), up from RMB3.7 billion (US$568.5 million) in January.

China is also positioning Hainan as a strategic Free Trade Port, with several port developments underway, including in Hainan’s capital, Haikou, Cainiao said.

The company noted that its direct flights will allow businesses to leverage Hainan’s position as a major duty free shopping hub as well as the island’s facilities for consolidation of component products being brought in for additional work and assembly from ASEAN and beyond.

[1] https://www.163.com/dy/article/G7CTI42D05199NPP.html

About Cainiao Network

Established in 2013, Cainiao Network is dedicated to meeting Alibaba Group’s logistics vision of fulfilling consumer orders within 24 hours in China and within 72 hours anywhere else in the world.

To realise this vision, Cainiao Network continues to build and operates a global fulfillment network together with logistics partners.

It offers domestic and international one-stop-shop logistics services and supply chain management solutions, addressing various logistics needs of merchants and consumers at scale.

Footnote: Every fortnight The Moodie Davitt Report publishes Hainan Curated, in association with Foreo, a selection of all recent stories from the offshore duty free sector in Hainan province.

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