{"id":11241,"date":"2022-11-15T07:30:04","date_gmt":"2022-11-15T07:30:04","guid":{"rendered":"https:\/\/focus.cbbc.org\/?p=11241"},"modified":"2025-04-23T09:36:10","modified_gmt":"2025-04-23T09:36:10","slug":"is-duty-free-shopping-in-hainan-the-future-for-luxury-brands-in-china","status":"publish","type":"post","link":"https:\/\/focus.cbbc.org\/is-duty-free-shopping-in-hainan-the-future-for-luxury-brands-in-china\/","title":{"rendered":"Is Duty Free Shopping in Hainan the Future for Luxury Brands in China?"},"content":{"rendered":"

The southern Chinese island of Hainan has become a consumer hotspot, driven by duty-free spending in huge new malls. But will economic slowdowns and continued Covid uncertainty dampen demand?<\/h2>\n

On Friday, 28 October 2022, the world\u2019s largest duty-free shopping mall opened in Haikou, the capital of China\u2019s Hainan Province. Owned by China Duty Free Group, the 3,000,000-square-foot cdf Haikou International Duty Free City is home to more than 800 international and Chinese luxury brands, including over 300,000 square feet allocated to beauty alone. This is not the first time that Hainan has claimed the title of the \u201cworld\u2019s largest duty-free shopping mall\u201d (there are already huge malls in Sanya on the south of the island and Bo\u2019ao on the east coast) signifying the importance of the island for consumer brands in China.<\/p>\n

Join CBBC for the first in a new China Chat<\/a> series on 17 November to discuss Hainan<\/strong>\u2019s role in China\u2019s commercial layout and the blueprint for the country\u2019s consumer market development going forward.<\/strong><\/h4>\n

Click here to register<\/strong><\/a><\/h4>\n

Over the past couple of years, the tropical island off the coast of southern China has recorded a rise in visitors and duty-free sales. \u201cVisitors to Hainan have grown from 11 million in 2012 to 21.6 million in 2021, and duty-free sales have grown from \u00a3267 million in 2012 to \u00a35.8 billion last year,\u201d says James Hebbert, managing director of Hylink UK. The duty-free allowance for travellers departing Hainan (but not leaving China) is currently RMB 100,000 per person per year.<\/p>\n

Since China closed its borders at the beginning of the Covid-19 pandemic, James notes that some of Hylink\u2019s clients have seen the revenue that was previously gained in Europe from Chinese tourists replaced by domestic sales in China. Despite the occasional uncertainty caused by lockdowns and restrictions<\/a> on domestic Chinese travel, money is being poured into Hainan\u2019s duty-free malls and once the tropical resort is back in full swing, it is likely that middle-class Chinese residents will be the first to return.<\/p>\n

\u201cConsumers are entering a new era of duty-free shopping, and this is not going away even if the international travel restrictions [are not yet] easing,\u201d says Rocky Chi, head of planning at leading Chinese marketing consultancy and full service agency, Emerging Communications. \u201cThe Chinese government will continue to push for duty-free shopping, and as for consumers, they are still quite spoiled for choice by such an easy way of shopping.\u201d<\/p>\n