Hainan’s offshore duty free sector generated sales of CNY28.93 billion (USD4.01 billion) in the first seven months of 2023, up by around +20 percent year-on-year. Total sales including duty paid reached around CNY35.7 billion (USD4.95 billion).
The January-July period saw 4.19 million shoppers who collectively purchased 34.03 million items.
A strong first-quarter drove the seven-month increase but – as in Northeast Asia’s other duty free hotbed of South Korea – sales have tumbled recently due to the official crackdown on daigou trading in Hainan from the end of April.
Duty free sales approximately halved in Q2 over Q1.
The impact of the crackdown can be seen by July sales, which reached CNY2.64 billion (USD366.2 million), down -34 percent year-on-year (+14 percent month-on-month).
The number of shoppers for the month was 466,000, down -2 percent year-on-year and -15 percent month-on-month.
Government steps up efforts to boost spending
The Hainan provincial government is working hard to boost offshore duty free sales.
From 22 June to 31 July, it issued CNY30 million (USD4.2 million) of duty free consumption vouchers. Further vouchers are being issued this month.
Retailers and brand partners are playing their part with a flurry of heavy promotional campaigns online and offline.
The second Hainan International Offshore Duty Free Shopping Festival and the fifth CDFG Hainan Offshore Duty Free Shopping Festival kicked off recently, featuring some 800 domestic and international brands across multiple categories.
(Source: The Moodie Davitt Report )