CHINA. Sales at Hainan’s offshore duty free shops (including tax-paid items) rose by +127% year-on-year in 2020 to around CNY32.74 billion (US$5.05 billion), according to a report in trusted Chinese state media China News.com, citing Hainan Provincial Commerce Department Deputy Director Peng Wei.
Peng was speaking during the third press conference of the province’s 13th Five-Year Plan last week. The numbers have also been confirmed to The Moodie Davitt Report by Hainan Provincial Bureau of International Economic Development (Hainan IEDB).
The continued rapid evolution of sales has become a new driving force for Hainan’s consumption growth, Peng said. He paid tribute to the impact of the enhanced duty free shopping policy introduced on 1 July, 2020. This boosted the annual allowance, raised the number of categories, removed the single purchase value limit, and increased the number of cosmetics skus that could be bought.
The 2020 offshore duty free revenues represented over 16% of the province’s total consumer goods retail sales.
Second-half surge
For the period between 1 July and year-end alone, sales of cosmetics rose 1.4-fold to CNY10.53 billion (US$1.6 billion), accounting for 52% of turnover, the report said (The Moodie Davitt Report is seeking a further breakdown of the results).
Watches and jewellery, boosted by the removal of the previous CNY8,000 (US$1,235) limit on a single purchase, grew 3.4-fold to CNY4.89 billion (US$754 million), accounting for 24% of sales. Fashion and leathergoods generated a 1.7-fold increase to CNY3.78 billion (US$582.8 million), or 19% of the total mix.
Newly-added categories, spirits, wine and electronics products, proved highly popular, with total sales (not broken down by individual category – again The Moodie Davitt Report is seeking further details) exceeding CNY540 million (US$83.3 million) during the same period.
Peng promised further improvements to the offshore duty free policy, including an improvement in the airport pick-up system, where high demand has prompted delays.
Hainan Island: Travel retail’s global hotspot The Moodie Davitt Report will publish a Hainan Island Special Report with the China edition of The Magazine in February 2021. Written by Martin Moodie and Dermot Davitt, it will explore how the offshore duty free business in China has become critical to the world’s leading brands across many categories. 海南:旅游零售业的全球焦点 穆迪戴维特报告(Moodie Davitt Report)将于2021年2月随The Magazine的中文版发表《海南特别报道》。该篇由马丁·穆迪(Martin Moodie)和德莫特·戴维特(Dermot Davitt)撰写,将探讨中国的离岸免税业务是如何变得对跨类别的各大全球领先品牌至关重要。 报告将覆盖以下内容:
The report will feature:
Contact Irene@MoodieDavittReport.com to partner with The Moodie Davitt Report for this special edition. |