This photo, taken on April 14, 2024, shows a view of the Hainan International Convention and Exhibition Center, the main venue for the fourth China International Consumer Products Expo, in Haikou, south China's Hainan province. [Photo by Wang Yiming/China.org.cn]

Thousands of investors, brand representatives and businesspeople are flocking to Haikou, located in south China's island province of Hainan, for the fourth China International Consumer Products Expo (CICPE), which is currently in full swing until April 18.

This year's expo has attracted 4,000 brands from 71 countries and regions, showcasing the island's meteoric rise as an offshore duty-free hub.

Despite only introducing its offshore duty-free policy in 2011, Hainan is on the cusp of overtaking South Korea as the world's premier duty-free market. The island now stands shoulder-to-shoulder with Hong Kong and Milan as the most sought-after destination for Chinese consumers looking to indulge in luxury purchases, according to international auditing firm KPMG.

China Duty Free Group (CDFG), the dominant player in Hainan's duty-free market, is participating in the expo with a sprawling 600-square-meter exhibition booth. Besides taking part in the expo, CDFG is also holding events at its Haikou shopping complex, the world's largest duty-free shopping mall. The company, a pioneer in Hainan's duty-free industry since opening its first store on the island in 2011, has experienced explosive growth that parallels Hainan's rapid development as a duty-free haven. The company now operates five of Hainan's 11 duty-free malls.

A few years ago, as the COVID-19 pandemic ravaged the global duty-free sector, Hainan's market bucked the trend. In 2020, the annual offshore duty-free shopping quota increased to 100,000 yuan per person, attracting consumers to the island for luxury shopping while international borders remained closed. This resulted in a 127% spike in duty-free sales from the previous year, according to Xinhua Silkroad, a Belt and Road portal under Xinhua News Agency.

Despite concerns that Hainan's duty-free allure would wane as shoppers returned to traditional destinations like South Korea post-reopening, the island's duty-free growth has shown no sign of slowing. In 2023, duty-free spending surged by 25% year on year, with the first quarter alone seeing a staggering 60% increase in duty-free purchases over the Spring Festival holiday, totaling a record $346 million, according to Haikou Customs.

Since their introduction in 2011, these duty-free policies have significantly boosted the local economy, with tourism revenue expected to quadruple this year alone.

Beyond Hainan's picturesque beaches and climate, the most important factors to its success are ongoing strategic planning and policy support. Both the provincial authorities and China's central government have consistently optimized and released new policies to bolster the island's duty-free industry. Recent enhancements, such as a streamlined pick-up process for duty-free purchases and zero-tariff lists covering imported luxury items, have made the island even more attractive to investors and consumers.

The duty-free policies and related trade liberalization have attracted substantial foreign investment. According to local authorities, the number of newly established foreign-funded enterprises has grown by an impressive 65% annually since 2018, reaching a total of 6,543 businesses.

Hainan continues to invest in its duty-free transformation, retail upgrades and enhanced tourism offerings. By 2025, the tropical province will achieving independent customs operations, providing global traders benefits such as zero tariffs and other preferential policies facilitating imports and exports.

Related

Go to Forum >>0 Comment(s)