The government aims to lure more luxury spenders to Hainan. (Photo : Getty Images)
China plans to entice its citizens to spend their money shopping in a duty-free paradise located in Hainan, rather than splurge in other countries’ big cities such as Seoul, Paris, Tokyo and Milan. With over 60 beaches and several luxurious resorts, Hainan is a fine spot for duty-free shopping, according to market analysts.
About 80 percent of the luxury goods of rich Chinese citizens are purchased abroad, according to Bain Consultancy.
Erwan Rambourg, an HSBC analyst from Hong Kong, said, "Whether it is Burberry or Richemont recently, many brands in the space have noted that the future of luxury demand will be about the Chinese and incrementally at home."
Companies do their best to keep the luxury spenders at home by providing access to world-renowned brands in the duty-free place in Hainan. Two of these firms include the China International Travel Service Corp. Ltd. and HNA Group Co. Ltd. The latter saw an increase of 160 percent in sales during the first quarter of 2016.
Meanwhile, the government plans to build more duty-free shopping centers across China. However, the current deceleration of economic growth and the recent reports of public officials demonstrating their wealth are both important factors behind the 2-percent drop in luxury good sales in 2015.
Reuters reported that since 2011, buyers can purchase duty-free goods worth up to 8,000 yuan or $1,220 biannually.
However, things changed since Feb. 2016 as the government allowed the customers to buy duty-free goods anytime with a maximum limit of 16,000 yuan per year.
Despite efforts from both private and public sectors, shoppers still notice that the duty-free shops in China offer less choices in products and brands compared to other cities like Seoul and Tokyo. However, many Chinese luxury spenders now prefer to purchase goods in local duty-free shops because of the cheaper prices.
