Retail in Asia

Travel Retail

China Duty Free Group to accelerate construction of duty free store in Hainan

China Duty Free Group

China Duty Free Group is accelerating its role in leading the travel retail industry into post-COVID-19 recovery with a series of major developments on Hainan island.

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Construction of the Haikou International Duty Free Mall on Hainan, which began in 2019, is being accelerated, according to China Duty Free Group (CDFG) President Charles Chen.

“The Haikou International Duty Free Mall will become the largest single duty free store in the world and a wonderful travel destination, with a total area even exceeding CDF Mall in Sanya. The construction… will take three years to complete. It is a large scale international duty free complex, embracing duty free and duty paid business, office space, and a hotel. The complex is already at the foundation and basement building phase,” Chen said during a wide-ranging interview with Martin Moodie for The Moodie Davitt Magazine.

“Also, our two downtown duty free experience stores opened on 13th May in Sanya, located in Mangrove Tree Resort Hotel, with an area of more than 740sq m, and the Nanshan scenic spot, respectively. We have a team of professional salespeople in place who can bring better understanding of the offshore duty free policy to consumers in both stores. Coordinating with the Hainan government, we will also have duty free experience stores covering 1,700sq m in Sanya Phoenix International Airport’s airside area; while we will add 7,000sq m at the Haikou downtown store,” Chen continued.

“We are also speeding up the construction of 8,000 sqm of retail space at Haikou Meilan International Airport Terminal 2. On top of that we plan to launch a series of big marketing promotions on the island,” Chen added.

CDFG was hard hit by the COVID-19 outbreak, which escalated through January and February. But with the Chinese authorities and people having worked with impressive discipline and responsibility, the rate of new infections and deaths has plunged. 26th May just one case was reported across the entire Mainland, maintaining a sustained run of single digit-cases in 16 of the past 17 days.

That improvement has led to travellers returning to Hainan island, with sales surging again during the recent May holidays, Chen revealed. “We see strong future prospects, starting from the May holiday. We held some promotions during the holiday, and the total sales generated by Hainan’s four stores exceeded the same period last year, with daily revenue reaching CNY200 million (US$28 million) on 1st May, which is very impressive.”

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On 22nd March, Hainan’s provincial government announced a US$21.2 million rejuvenation plan for the island’s tourism industry with duty free shopping at the heart of the programme. Asked if liquor and even tobacco could be added to the categories that are allowed to be sold in offshore duty free as part of that rejuvenation, Chen said: “We have also called for a widening of product categories as well as increasing the duty free allowance to revive the local economy and thus make a strong contribution to the free trade port construction during the post-crisis period.”