Will brands cash in on Hainan’s duty-free boom?

    Hainan's duty-free shopping venues drew a record 85,800 tourists during this year’s May Day holiday, generating $75.6 million in tax-free sales.
    Hainan’s tourism market rebounded strongly in 2023. Image: Getty Images
      Published   in Travel

    During this year's May Day holiday, Hainan's duty-free shopping venues proved a magnet for tourists. Haikou Customs reported on Monday that 85,800 shoppers spent an estimated 547 million RMB ($75.6 million) on tax-free purchases.

    The surge in spending was bolstered by a flurry of promotional initiatives orchestrated by the Hainan government and duty-free shops. Haikou City distributed 14 million RMB ($1.9 million) in consumption vouchers and nearly one million RMB ($128,967) in digital RMB, while Sanya City distributed more than 20 million RMB ($2.7 million) in consumption vouchers over the course of the holiday.

    Across Hainan Island, duty-free outlets rolled out special offers to encourage shoppers. CDF (China Duty Free) Haikou International Duty Free City offered five times the loyalty points on various products, discounts of up to 50% on select perfume and cosmetics products, and 80% discounts on certain fashion items.

    According to Sun Huiyan, sales manager at CDF Haikou International Duty Free City, these deals were further sweetened by additional perks like dining and parking vouchers.

    Duty-free shopping has emerged as the cornerstone of Hainan's tourism consumption ecosystem, with 2023 witnessing a staggering 43.76 billion RMB ($6 billion) in spending. In the first quarter of 2024, Hainan’s service trade grew by an impressive 29.62% year-over-year (YoY) to $2.03 billion, with service exports surging 40.22% YoY to $1.01 billion.

    Fueled by an influx of international visitors, particularly from South Korea, Malaysia, Russia, Mongolia, and Singapore, Hainan’s inbound travel services revenue spiked to $273 million. The island's tourism sector rebounded last year, with tourist arrivals and revenue expanding by 49.9% and 71.9%, respectively, both record highs.

    Official forecasts project a further 10% increase in shopping expenditure this year, underscoring the pivotal role of duty-free offerings in driving Hainan's tourism and economic growth.

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