The domestic duty-free policy has been tried out in Hainan for a year now. According to Haikou Customs statistics, over 900,000 tourists left Hainan with about 2.9 million pieces of duty-free goods worth more than Rmb1.8 billion as of 15 April this year. Daily turnover amounted to about Rmb5 million. This figure actually exceeds the annual turnover of the Sanya Downtown Duty-Free Shop before the implementation of the domestic duty-free policy. 

Highest daily turnover exceeds Rmb10 million 

The domestic duty-free policy was piloted in the Sanya Downtown Duty-Free Shop on 20 April last year, making Hainan the fourth region after Japan's Okinawa, South Korea's Jeju Island, and Taiwan's Kinmen and Matsu islands to implement this policy. For quite some time after the launch of this pilot policy, the Sanya Domestic Duty-Free Shop of the China Duty-Free Group was always packed, with supply failing to meet demand. A new domestic duty-free shop was opened at the Haikou Meilan Airport on 21 December. 

According to Haikou Customs statistics, over 900,000 tourists left Hainan with about 2.9 million pieces of duty-free goods worth Rmb1.8 billion as of 15 April. Daily turnover amounted to about Rmb5 million. Of this, turnover at the Sanya Duty-Free Shop amounted to Rmb1.67 billion, with the number of customers reaching 770,000; turnover at the Haikou Duty-Free Shop amounted to Rmb140 million, with the number of customers reaching 130,000. Hainan registered a tourism revenue of Rmb32.4 billion last year, up 25.8% year on year. 

"Our duty-free shop grossed about Rmb3 million a year before the launch of the domestic duty-free policy. Today, we can attain this target a day even during the slack season,” said Wang Xuan, general manager of the Sanya Downtown Duty-Free Shop. 

According to an executive of the China Duty-Free Group, the Sanya Duty-Free Shop achieved a daily turnover of Rmb9 million during the 16 days between the Spring Festival and the Lantern Festival. Over 20,000 tourists visited the Sanya Duty-Free Shop on 25 January. Turnover that day amounted to Rmb12.9 million, a record high since the opening of the shop. 

The China Duty-Free Group has already kicked off its Sanya Haitangwan project. The Haitangwan international Duty-Free City will eventually be developed into a comprehensive tourist resort with duty-free shopping as its theme. 

A total turnover of Rmb1.8 billion exceeds the turnover of a large shopping centre in a core city. Wang Hua, deputy director of the general office of the General Administration of Customs, said earlier that Rmb1.5 billion basically amounts to the annual turnover of a large shopping centre in Beijing. 

Calls for raising cap on duty-free purchases 

According to regulations, duty-free purchases are capped at Rmb5,000 and tourists are entitled to enjoy the benefits of this policy twice a year. They cannot buy more than five items of cosmetics, fashion and accessories, four items of small leather goods, and two items of jewellery and perfume each time. 

According to an executive in charge of the Haikou Meilan Airport Duty-Free Shop, the shop had reaped considerable economic gains although it was only opened for business four months ago. However, it is still unable to maximise the benefits of the domestic duty-free policy due to its location, shop size, product mix and other restrictions.

"Most customers think the purchase limit is too small,” said Liu Jing, deputy general manager of Sanya Downtown Duty-Free Shop Co Ltd. People who had been to the Sanya Duty-Free Shop said the purchase limit is making things very inconvenient for them. They explained that they were asked by their friends to buy some skin care products, but since they cannot buy more than five items of cosmetics products, which are not even enough for their own use, they are unable to help their friends.