It’s not just the international companies pursuing Chinese shoppers. Chinese cities are in hot pursuit of them as well.
In a bid to promote domestic tourism and spending, cities around China are set to dangle duty-free shops to bring in Chinese travelers.
Hainan Province (China’s Hawaii) became the first region in China to allow Chinese travelers to shop duty-free this past April.
Chinese tourists can now buy luxury goods that they would usually buy in Hong Kong or abroad, where luxury goods are generally cheaper, in the Mainland.
Each Chinese visitor to Hainan is allowed to buy duty-free goods worth up to 5,000 yuan (US$771) twice a year. Duty on most goods can range from 15 percent to 35 percent.
While the duty-free allowance is not enough to cover some higher priced luxury purchases, it still draws shoppers. Thousands of tourists swarmed the duty-free store in Sanya, Hainan Island buying out brand name products including L’Oreal, Swatch, Estée Lauder, Chanel, Dior and Lancome on opening day this past April. Some customers had lined up outside the store since 5 in the morning.
In fact, the duty-free policy and heavy publicity have made Sanya a hotspot, according to Zhang Ruiting, senior investment manager with China International Travel Service Limited.
Now, Tianjin city in northern China is seeking government approval for its plan to turn Dongjiang Island into a duty-free shopping zone.
Duty-free shops are part of a larger plan to develop Dongjiang Island into a free-trade port, exempting imports and exports from tariffs, according to Tianjin Mayor Huang Xingguo.
Shanghai is also planning duty-free stores at the city’s two airports and the soon to open Disneyland.
Other cities are also looking to take advantage of duty-free shopping to build themselves into tourist destinations. Zhejiang Province in central China plans to open duty-free shops at Zhujiajin, on the Zhoushan Islands.
While Zhuhai and Shenzhen in Guangdong Province are looking to Hong Kong and Macau as examples as they prepare their duty-free shopping zone.
Without a doubt, duty-free stores will boost China’s domestic consumption and speed up economic restructuring. Some experts believe duty-free shops should be encouraged around the country to keep consumption in China.
photo credit: newbie runner