CHINA. Hainan Provincial Department of Commerce revealed at a press briefing today that more than 20 brands, including Estée Lauder, Cartier, Bvlgari and Tiffany, had posted global record-setting travel retail single-store sales in their Hainan offshore duty free shops over the past year, according to reports by local media Hainan.net and Sansha Satellite TV.
The titles reported that from 1 June, 2020 to 31 May, 2021 – i.e. in the 12 months since the release of the overall plan for the construction of Hainan Free Trade Port – duty free shops across the island sold RMB45.5 billion (US$7.12 billion) of duty free goods, a +236% year-on-year increase.
The findings, since confirmed by The Moodie Davitt Report with the Hainan Provincial Bureau of International Economic Development (Hainan IEDB), underline the stellar year that Hainan’s offshore duty free business has enjoyed – and the dramatic impact of the enhanced shopping policy introduced on 1 July.
Some 8.77 million duty free transactions were made, up +144% year-on-year; while 47 million duty free items were purchased, a +152% rise.
The number of offshore duty free business entities (i.e. licence holders) grew from two to six in the period, while the number of duty free shops rose to ten.
The duty free retail operating area increased by 7,000sq m to 210,000sq m (the number will exceed 500,000sq m when the new Haikou International Duty Free City – owned by CDFG – opens in June 2022), and the number of international brands represented has grown from less than 100 to 650.
In addition, the duty free market is no longer so dominated by beauty and fragrance products, the Department said. Thanks to the enhanced duty free shopping policy, the sector features a wide variety of offerings, ranging from jewellery, watches and luggage to apparel (the removal of the previous RMB8,000/US$1,250 has spurred all high-end categories), electronics and other commodities (including new categories such as cellphones and wines & spirits).
The numbers suggest that Hainan is poised to smash its previous annual duty free sales record of US$5 billion, set in 2020.
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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