LONDON – ChinaPent-up demand for travel retail has left overseas duty-free shopping in Hainan island, the country’s southernmost province, off the charts.
According to data from the Hainan Provincial Department of Commerce, duty-free sales at the tropical island rose 84 percent in 2021 to 60.17 billion yuan, or $9.47 billion.
Tax-free sales last year jumped 83 percent to 50.49 billion yuan, or $7.94 billion. In 2020, the island recorded a 127% increase in duty-free sales to 32.74 billion yuan, or $5.05 billion.
The number of tourists visiting the island in 2021 has increased by 73% to 9.67 million, and the number of duty-free items purchased from 10 duty-free shops on the island has increased by 71% to approximately 53.49 million. people.
The Hainan duty-free market is dominated by five duty-free business licensees. they are China Tax exemption Group, CNSC, Hainan Tourism Investment Tax exemption Co., Hainan Development Holdings and Shenzhen Duty Free.
Due to the strict zero COVID-19 case policy, international travel is heavily restricted in China. Hainan is the only place that Chinese citizens can go during the pandemic.
In June 2020, the Chinese government detailed plans to establish a free trade port in Hainan, turning the island into a hub not only for tourism and retail but also health, technology, high-end manufacturing and financial services.
It also increased the tax-free spending allowance per person to 100,000 yuan, or about $15,500 at current exchange rates, from 30,000 yuan, the most generous overseas tax-free spending limit in the world. gender.
According to a report from KPMG and Moodie-Davitt, Hainan Duty Free 2022’s revenue is expected to grow to at least $15.5 billion and to $46.5 billion by the end of 2025.
Meanwhile, China’s other retail hotspot, Hong Kong, recorded a 97.7% drop in visitor arrivals in the first 11 months of 2021 due to border control measures.
https://wwd.com/business-news/retail/chinas-hainan-duty-free-revenue-2021-1235025293/ China’s Hainan Duty-free Revenue Hits $9.47 Billion in 2021 – WWD