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Hainan offshore duty free sales soar to record heights in February

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Hainan offshore duty free sales rocketed to RMB 4,790 million (USD 736 million) in February, up from RMB 3.70 billion (USD 568.5 million) in January, representing a record month for the sector.

Business was boosted sharply by the Chinese New Year celebrations, which as reported saw duty free sales reach RMB 1.4 billion (USD 216.5 million) in the peak period 11-17 February. Total sales, including tax paid items, reached RMB 1.5 billion/USD 231.9 million during the seven-day holiday, according to the General Administration of Customs.

828,000 shoppers visited the island’s duty free stores in the month, a quarter of them during the 11-17 February period.

Average spend per shopper shot up by +59% year-on-year to RMB 5,785 (USD 889) in February, rising to RMB 7,000 (USD 1,075) for 11-17 February. That was short of the H2 2020 average spend of RMB 6,676 (USD 1,025) but improved penetration rates helped drive volume.

Shopper conversion rate (excluding Hainan residents) reached an impressive 62.9% in February (up from 42.3% in January). That compares to just 29.1% in the second half of 2020 (post the introduction of the new policy).

For the first two months of 2021, sales have reached RMB 8,490 million (just above USD 1.3 billion). The stellar results, buoyed by the introduction of the enhanced duty free shopping policy last July and the introduction of four new downtown retailers in late 2020 and early 2021, mean that sales have already soared past the first-half results of both pre-COVID 2019 (RMB 6,766 million) and 2020 (RMB 7,494 million). The sector is well on course to shatter 2020’s full-year total of RMB 27,476 million (USD 4.22 billion – pure duty free) well before year-end.