On April 20, 2011, the pilot implementation of the offshore duty free policy started in Hainan. As one of the national policies with the highest “gold content”, it vigorously promotes the recognition and enthusiasm of people towards duty free shopping and facilitates the return of overseas high-end consumers.
This year is the 11th anniversary of the implementation of Hainan offshore duty free policy. Throughout these 11 years, the Hainan offshore duty free policy has been through a series of highly innovative developments, creating optimized business environments, expanding offline retail spaces, and realizing more diversified development of online e-commerce platforms. As the main participant in the Hainan offshore duty free industry, CDFG has formed a multi-dimensional layout in Hainan, including Sanya International Duty Free Shopping Complex, Sanya Phoenix Airport Duty Free Shop, Haikou Duty Free Shop, Haikou Meilan Airport Duty Free Shop and Boao Duty Free Shop. It continuously brings new vitality into the development of offshore duty free businesses.
Consumption potential continuously released with upgraded policies
In April 2011, the Hainan offshore duty free policy was implemented on a pilot basis. In April 2018, the CPC Central Committee strongly supported Hainan to gradually explore and steadily promote the construction of a free trade port with Chinese characteristics. In June 2020, the Overall Plan for the Construction of Hainan Free Trade Port was released and implemented, and the Hainan offshore duty free policy became even more flexible and responsive to market demand.
During these 11 years, the offshore duty free policy has been adjusted for eight times. The duty free limit has been increased to the current RMB 100,000 per person per year, and the duty free categories have increased to 45 categories. Duty free services have been opened to tourists travelling by trains, ships, self-driving, etc. from only travelling by air. Online sales windows and new “Mail delivery” and “Pick-up when returning to the island” methods have further improved the convenience of shopping. Continuous adjustments and relaxation of policies have greatly stimulated Chinese people’s consumption enthusiasm for duty free products and increased passenger flow to duty free shops year by year. During Spring Festival this year, Sanya International Duty Free Shopping Complex of CDFG received over 20,000 passengers per day, highlighting the rapidly growing attraction of duty free shopping.
Strengthened brand cooperation facilitates further implementation of the policy
As a world-renowned duty free operator, CDFG has continuously strengthened the construction of six core competencies, i.e., business planning and design, brand investment attraction, logistics distribution, operation management, marketing and digitalization. It has successively built up good cooperative relations with more than 1,000 well-known brands around the world, continuously consolidated its dominant position in the global duty free market, and improved its service reception, operation management, and logistics distribution capabilities.
Since the implementation of the policy, Sanya International Duty Free Shopping Complex of CDFG has been relocated from Dadonghai to Haitang Bay, with its business area expanded nearly tenfold, offering more than 700 brands, and the international brand lineup leading its greatly accelerated growth pattern. The well-established business format of CDFG is favored by major brands. Many brands have chosen to open their first duty free store in Sanya International Duty Free Shopping Complex and launched their new products and special pop-up events here, which has boosted the steady growth of sales. According to the statistics from Haikou customs, throughout the first quarter of this year, the total supervised amount of offshore duty free shopping in Hainan reached RMB 14.72 billion, with a year-on-year increase of 8.4%; the number of purchased items was 20.27 million, with an increase of 14.2%; the per capita shopping amount was RMB 8,372, with an increase of 10.2%.
Further improve service quality through digital empowerment
In the post epidemic era, it is critically important to accelerate the symbiotic relationship between online and offline consumption scenarios. CDFG actively innovated, timely outlined and planned the online duty free business and launched the online booking platform of “CDF Hainan Duty Free Official Mall” at the earliest date, so that tourists to the island can place orders online anytime, anywhere, and membership points can also be used synchronously. By creating the digital CDFG platform, we have spared no efforts to promote the diversification of service modes, further open up online and offline channels, provide consumers with all-round services “before, during and after travel”, and promote a spectrum of new experiences in duty free consumption with digitalization.
As for the offline stores, providing premium services for incoming customers is considered one of the core competencies of the enterprise. Sanya International Duty Free Shopping Complex and other shops have actively optimized various service experiences, sorted out and refined the workflow from the aspects of store cashier, online order pick-up, public opinion monitoring, customer service, etc., so as to provide premium, thoughtful and professional services for incoming customers.
Upon the 11th anniversary of the offshore duty free policy, the shops of CDFG in Hainan will simultaneously launch duty free exclusive, multiple points, value-added discounts and other bonus activities to benefit consumers. Haikou International Duty Free Shopping Complex, the world’s largest single intra-city duty free shop created by the Group, will be officially put into operation in the fourth quarter of this year. After completion, it will form a north-south complement to the Sanya International Duty Free Shopping Complex and continue to boost the construction of Hainan’s international travel consumption center.
Facing a market with great potential and huge consumer basis, under the leadership of the parent company China Tourism Group, CDFG will continue to expand and refine its duty free business in Hainan. Relying on the support of the constantly favorable duty free policy, CDFG will continue to introduce more popular brands and commodities into the Chinese duty free market, strive to innovate and upgrade the online and offline consumption experience, and continue to promote the prosperity of the offshore duty free industry on Hainan island in the pursuit of stability and long-term progress.