NEWS
CHINA’S HAINAN TO ADD 6 DUTY-FREE OUTLETS IN Q1, DFS AND LAGARDÈRE AWARDED LICENCES
By Siulan Law Mathews DipWSET
21-1-2021
Source: Sanya Municipal Government
Six new duty-free shopping outlets will be opened in China’s Hainan island in the first quarter of this year, adding 220,000sq m of duty-free shopping space to the offshore island province which has replaced Hong Kong to become China’s luxury shopping hub.
Two of the new outlets are located in the island’s provincial capital Haikou, another two in the second biggest and touristy city Sanya, the rest in the island’s airport terminals.
Before the addition of these six facilities, Hainan had four duty-free outlets, all of them run by the state-owned China Duty Free Group (CDFG).
Hainan provincial government has introduced competition to the duty-free sector by awarding licences to foreign travel retail companies to operate some of the new outlets.
French Lagardère Travel Retail is partnering Hainan Tourism Investment Development Company, a provincial state-owned enterprise, to open a 30,000sq m shopping complex in Sanya city.
LVMH-owned DFS Group has been awarded a licence to run one of the new outlets, it will be located in Mission Hills in Haikou city.
The retailer will partner with Shenzhen Duty Free Group to create a duty-free retail experience of 30,000sq m shopping space. It is expected to open in first quarter of this year.
Since Hainan authorities lifted the yearly duty-free shopping quota for individual visitors to RMB100,000 (USD15,220) from RMB30,000 last July, Hainan has replaced Hong Kong to become China’s duty-free shopping hub in recent months.
“The Hainan pie is big and it’s growing. There’s room to expand and create more value for everybody,” commented Eudes Fabre, Lagardère Travel Retail’s CEO for North Asia, at a December webinar held by world travel retail association TFWA.
The original four duty-free outlets on the island, all run by the state-owned CDFG, reported long queues during the 8-day National day holidays last October, scenes like these used to be reported in Hong Kong.
Just two moths into the new policy, Hainan authorities said duty-free sales grow 227 percent year-on-year to RMB8.61 billion in end of September.
Revenue of CDFG, which has 80 percent of China’s duty-free market share, was said to have surpassed that of the Basel-based Dufry Group which is the world’s largest operator of airport duty-free shops.
(the writer can be contacted at: info@thewinechronicle.com)
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