It’s on the verge of happening: Duty-free shops are expected to become a rage in Shanghai, mainland China’s commercial capital and most populous city. The local government has recently decided to take the road towards establishing a duty-free economy, capitalising on the fact that, following the Covid-19 experience, more and more Chinese are seeking to buy within China itself.
Duty-Free Retail Sales Surge
Imported luxury products that normally are burdened with high duties, can now become duty-free. Because of this, hotels, plazas, airports and authorised commercial outlets are expecting a significant surge in duty-free sales.
The benefits of a shift towards a duty-free economy are crystal clear, for all to see.
Hainan’s Success Story
A classic example is Hainan. Hainan Island in southern China tops the league when it comes to duty-free spending. The maximum annual amount of duty-free purchases was a whooping $15,000. And going duty-free is significant if you consider the fact that in China, although they vary, tariffs for luxury products such as watches and fragrances are subject to over 30% duty.
Regarded as China’s Hawaii, Hainan’s attractive duty-free policies allure millions of Chinese to visit the beautiful southern island to acquire luxury products at much lower costs.
China Tourism Group Duty-Free manages and owns around 200 duty-free shops out of the 300 duty-free shops across China. This activity generates billions of Chinese yuan yearly. Will Shanghai be the new Hainan in terms of offshore duty-free policy? This is yet to be seen. But if this happens, Shanghai’s shopping experience is about to get much better, drawing more and more people to its duty-free outlets.
We’re here to help you expand
Freightzone is keeping a close tab on things as they develop in the Chinese market. Its unparalleled expertise in this sector, particularly in the requirements and restrictions to trade within this market, is vital to clients wishing to invest and expand into China. Freightzone can be instrumental in providing guidance and up to date market intelligence to its clients that is crucial to success.
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