SANYA, September 29. /TASS/. Sales at Sanya duty free stores from in January-August rose by 66% to 11.36 billion yuan (about $ 1.67 billion), reported the Sanya Daily newspaper on Tuesday. According to the news outlet, in August alone goods worth 2.62 billion yuan (about $ 384.33 million) were sold in the city's duty free, which is by 222% more than in the same period of 2019.

According to the newspaper, the reason for such a rapid growth in sales was seen due to the expansion of the government's annual quota per person and assortment of stores, as well as the revival in the tourism sector amid the improving epidemiological situation in the country. From July 1, the quota for purchases in Hainan's duty free shops was increased from 30,000 to 100,000 yuan (from $ 4,200 to 14,200) per person, and the list of duty free goods was expanded from 38 to 45 positions. Moreover, the restriction concerning maximum price per unit not exceeding 8,000 yuan was lifted.

The data from the Hainan customs also demonstrate intensification of trade due to the authorities' more flexible duty free policy. According to a report published on September 11, 6.12 million goods were sold in July and August (an increase of 147.3% year-on-year), for a total of 5.58 billion yuan (about $ 818.53 million), an increase of 221.9 % more than the indicator for the same period in 2019. At the same time, the number of tourists increased by 54.8% reaching 832,000 people.

Better service 

In addition, the authorities have taken measures to improve the level of service in duty free stores. For example, since July 10, the administration of Phoenix International Airport in Sanya has doubled the number of duty free pick-up points from 18 to 38, for goods purchased through catalogs or online stores. This significantly reduced the time it took passengers to pick up the goods and also led to increased sales.

In addition, China Tourism Group, which operates a duty free center in Sanya, plans to open four outlet stores at Sanya Bay Mangrove Tree Resort, Nanshan Landscape Park, Phoenix Airport and the town of Wanning. Soon they will open their doors to visitors, who will be able to view the product in the showrooms and place their order online. According to the newspaper, this will not only increase sales, but also unload the central duty free shopping center in Sanya.

Duty free shops also launched several promotions in July, including the promo on one of the largest Chinese social networks Douyin (analogous to TikTok on the Chinese domestic market). And on July 29, the Hainan authorities opened a special online shopping co-op platform on the website of the world's largest online store Alibaba.

Expanding duty free stores 

This growth in sector sales not only revitalized Hainan's business and economy, but also motivated many Chinese enterprises to enter the market. According to the Sanya Daily, more than 10 large companies have already applied for a license for duty free trading, according to the publication, among them the Alibaba Group.

The authorities also plan to expand the number of duty free shopping centers. On August 19, Chen Xi, head of the Hainan Provincial Department for Commerce, announced that the regional government plans to open three more such stores: one at Phoenix Airport and two more in Sanya. The official stressed that it was mandatory for the operator of one of the duty free shops within the city to open a store outside of Hainan province. This decision was made to create a competitive environment and improve the quality of services provided in the sector.

Another measure to boost duty free sales was the opening of new transport routes between Hainan and other provinces. In particular, in September, regular bus services were launched from Sanya and Haikou to cities such as Huazhou (Guangdong Province) and Luchuan and Pubei (Guangxi Zhuang Autonomous Region). At the same time, two of them will arrive directly in Sanya, which is expected to increase traffic to duty free shops.

According to the newspaper, the tourist flow to duty free stores contributed to the rapid recovery of the province's economy and the tourism sector of Hainan from the pandemic. At the same time, this sphere of tourism has great potential for growth, and its full development will bring the region's tourism industry to a qualitatively new heights. 

There are currently four duty free shops on the island: two of them are located in the provincial capital, Haikou, and the rest — in Sanya and the coastal town of Boao. Last week, the local authorities announced three more duty free shops will open in the province by the end of 2020 in Sanya. 

Duty-free shops are part of the government's plan to promote international tourism in Hainan. By the end of this year, it is planned to open three more new duty-free shops. The authorities explained the need to increase the number of duty free shops in the province by the growing number of tourists and the high demand for duty-free goods. All three new stores will be located in the resort town of Sanya. One of them will open at the airport, and the other two — in the suburbs.