(Yicai Global) Sept. 7 -- Hainan province, the tropical getaway island at the southern tip of China, is poised to issue a fourth offshore duty-free business license. Many companies have bid for it, Yicai Global learned from a number of sources.
On July 10, Hainan announced that it would pick another operator through a tender to help align operating brands, varieties, and prices to international standards. The provincial government will announce the results of the bidding soon, according to one source.
Hainan has already licensed Hainan Tourism Investment Duty Free Products, owned by Hainan Tourism, as well as Global Consumer Boutique Hainan Development and Trade, a wholly-owned unit of Hainan Development Holdings. China Duty Free Group was the only operator with four outlets in the province before.
Local government approval for two Hainan companies to run an offshore duty-free business will help the province develop a diversified and differentiated business structure, Chen Xi, director of Hainan’s commerce department, said at a press conference on Aug. 19. Hainan will also welcome outside firms to participate in the local duty-free business to better meet consumer demand, he added.
More players in the sector will not only boost competition, but also pare back monopoly, so that consumers can enjoy more benefits, Wang Yiwu, dean of the Hainan Research Institute of Modern Management at Hainan University, told Yicai Global earlier.
Public data show that from July 1 to Aug. 18, sales of the island’s four offshore duty-free shops exceeded CNY5 billion (USD731.9 million), up 2.5 times year-on-year, and the number of buyers reached 740,000, a 70 percent increase. The number of purchases was 4.58 million, rising 1.5 times.
The sector believes that alternative outbound tourism and duty-free consumption featuring domestic tax exemptions are expected to strengthen in the context of the severe global Covid-19 outbreak and the uncertain recovery of outbound tourism.
Editor: Peter Thomas