Hainan Island Departure Duty-free Shopping Grows 257%

Haikou Customs announced that in the first six months of 2021, island departure duty-free shopping totaled 26.767 billion yuan, with 3.823 million visitors purchasing 36.9 million duty- free items, a year-on-year increase of 257.2%, 56.5%, and 258.9% respectively.

Duty-free shopping is a key industry in Hainan. The new Hainan duty free industry policy, which went into effect July 1 last year, increased the duty-free shopping spending amount limit, the product limit, and the scope and type of duty-free goods on the islands. In February, two methods for pickup including "postal delivery" for visiting shoppers and "pickup upon return" for island residents were added in order to further improve the shopping experience and expand the effect of the policy. By the end of June, Hainan duty-free enterprises had sent 2.08 million items worth around 1.23 billion yuan by post for 231,000 shoppers, and had 13,000 return pick-ups by local residents of 124,000 items worth around 100 million yuan.

According to the Haikou Customs Control Department, since the implementation of the new policy one year ago, Haikou Customs has continuously improved its institutional system and optimized their supervision process, including strengthening supervision of key links such as quarantine access, preventing duty-free goods from being resold, strengthening industry risk monitoring and early warnings, increasing inspection and sampling of imported duty-free commodities to ensure the quality and reliability of products, and more. 

While constantly strengthening supervision and optimizing services, Haikou Customs has made great efforts to crack down on illegal smuggling activities by taking advantage of the island’s duty-free policies. Since 2020, Hainan has opened five new duty-free shops, and there are now total of nine duty-free shops in operation in the province. Travelers departing from Hainan by ferry, train, or plane are all eligible to participate under the current duty-free policies, making it convenient for them to shop and pick up their purchases, and the industry composition is now more balanced.

A new research report from McKinsey & Company states that Hainan's duty-free market is expected to grow tenfold from 2020 to 2025, making it one of the largest tourism retail markets in the world. According to the report, policy dividends, increased investment in island departure duty-free operators, and more competitive prices are all positive factors contributing to the growth of Hainan’s duty-free market.