Duty-free is a concept known to all international travellers. In Duty Free shops customers are able to purchase an item without paying import, sales, value-added, or other taxes. The products are exempt from duties and taxes with the understanding that they will be taken out of the country of purchase for use. Liquor, chocolate, perfume and cigarettes are the most popular duty-free items in airport stores.
Duty-paid on the other hand, refers to products being offered to domestic where all import, Sales, Value-added and other taxes have been paid already.
Hainan Island started its way towards an independent customs system in June 2020, when duty-free retail was introduced in 12 big shopping malls. Until now, customers who shop at Hainan’s duty-free malls can however only use their purchased products after leaving the island. Earlier this year it was announced, that from 2025 the entire island will be duty free and that Hainan will permit duty-free items to be consumed on the spot, which will provide the benefits also to residents and hopefully will encourage visitors to extend the duration of their visit.
These plans have however not stopped Swire Properties and the China Tourism Group to restart their Sanya Yunjie Island duty & tax paid project in Haitang Bay. Betting on the increased interest of Chinese consumers in the quality of the purchasing experience, duty-paid store by brands like Louis Vuitton, Alexander Wang, Buccellati, Celine, Dior, Fred and 13 other stores in the last few months.
For international destinations, Hainan is proposed to become a bigger competitor in coming years in the field of shopping tourism. However, with shopping losing importance for many international Chinese travellers as the main travel motivation, this is yet another indicator to transform the itineraries towards other activities.
Hong Kong SAR will probably be the main victim of the ascent of Hainan. Already now not only retailers are complaining about the lack of customers, even though more Mainland Chinese are visiting again. Bars and restaurants are also suffering despite the launch by the Hong Kong government of a “Night Vibes” campaign, establishing new bazaars at three waterfront areas and organising Wine and Dine festivals among other activities. Many of the expats have left the SAR during and after the pandemic and the Mainlanders now working in Hong Kong are seen as spending their money rather in Shenzhen.
As usual, the COTRI weekly Editorial is included in the free part of the new content of this edition, together with this text “China this week”, the News and the COTRI News. For the Topic of the Week, the Deep Dive consulting and the Facts and Views we invite you to consider a Premium or Premium Plus subscription and offer a special welcoming subscription for one month with a 59% discount here: https://cotri-intelligence.ghost.io/welcoming-offer.
In this week’s Topic of the Week we look at the “Double Eleven” shopping event and what tourism service providers can learn from the online sellers’ reaction to the changed consumption patterns in China.
The Deep dive consulting text concentrates this week on sustainable tourism as a topic which has gained importance worldwide including Chinese outbound tourism. Sustainable tourism will also be the topic of one of the four “villages” COTRI is organising for the GITF 2024, to provide an opportunity for tourism service providers, specialised tour operators, eco-friendly hotels and destinations to enter the market with low cost but high visibility.
Facts and Views follows up on the general discussion of the comparison of arrivals in the 3rd quarter of 2019 and 2023 respectively and the development in Hong Kong SAR in the last issue. This week we have a closer look at a comparison of pre- and post-pandemic Mainland visits to Hong Kong SAR with a focus on the development of same day visits and overnight stays.
Additionally, the COTRI weekly Editorial reflects on the role connectivity has played in China’s tourism recovery in 2023.
In the News you will find as always selected news items about different aspects of the Chinese outbound market.
Enjoy this week’s new content and the growing library of previous articles!