Sales from offshore duty free shops in Hainan have reached more than RMB12.01 billion in the period from 1 July to 31 October 2020.

Sales from offshore duty free shops in Hainan have reached more than RMB12.01 billion/$1.81 billion in the period from 1 July, when the raised RMB100,000 allowance and expanded product category list (38-45) were introduced, to 31 October 2020.

According to a Haikou Customs announcement, which was seen by TRBusiness, the RMB12.01 billion figure represents a year-on-year increase of +214.1%.

During the period, Hainan’s duty free shops welcomed 1.783 million shoppers, an increase of +58.8%. In addition, 12.869 million items were purchased, an increase of +139.7%.

As reported, Chinese shoppers embarked on a spending spree in Hainan during the eight-day Golden Week national holiday period (1-8 October). Duty free sales exploded by nearly +150% to reach RMB1.04 billion/$155.3 million.

Cosmetics ranked first in terms of sales volume and value between 1 July and 31 October. Cosmetics, watches and jewellery were the top-three sellers, with sales amounting to RMB5.82 billion (+164.5%), RMB1.47 billion (+353.8%) and RMB1.45 billion (+404.7%) respectively.

COSMETICS TOP THE SALES CHARTS

Further Haikou Customs statistics indicate that 10.78 million cosmetics pieces (+144.6%), 614,000 perfumes pieces (+205.3%) and 211,000 jewellery pieces (+116.2%) were sold on the island.

Cosmetics ranked first in terms of sales volume and value in Hainan duty free stores.

The top three commodities accounted for 72.8% of total duty free sales during the period in question.

Meanwhile, Haikou Customs has continued its crack down on customer violations. The objective is to create a ‘good legal environment’ which facilitates the construction of the Hainan Free Trade Port (FTP).

Regarding the FTP, the implementation of new administrative tax management measures on 1 November, help promote its construction.

In the meantime, video surveillance and store inspections have increased, inspection posts have been created and an ‘anti-return system’ has been implemented at high-risk outlying island ports (seaports).

The purpose of the ‘anti-return system’ is to accurately screen, identify and quickly remove ‘returning’ passengers.

As of 31 October 2020, Haikou Customs has intercepted and discouraged 701 passengers from breaching Customs regulations.

THREE-YEAR BANS FOR RULE-BREAKERS

In addition, 228 passengers who broke the rules were banned from purchasing duty free products in Hainan for three years.

A Haikou Customs statement said: “Eligibility effectively maintains the stability and order of the domestic market economy and guarantees the reforms to Hainan’s tax exemption policy benefits the people.

“Haikou Customs, in conjunction with the local government, has also made every effort to implement joint disciplinary measures for untrustworthy people who violate the regulations associated with the island’s duty free policies.”

The Hainan Provincial Bureau of International Economic Development is charged with the task of generating foreign investment in the Free Trade Port.

Meanwhile, Haikou Customs has emphasised that any customers breaking the rules will be dealt with in accordance with the relevant laws and regulations.

Those purchasing duty free goods for others in Hainan and making a profit or reselling duty free items bought on the island in the domestic market, will be unable to benefit from Hainan’s new duty free policies for three years.

Anyone providing false identification/travel documents, or using non-compliant identity/travel documents when purchasing or collecting duty free products, will suffer the same fate. Customers providing any form of false information will also face a three-year purchasing ban.