CHINA. Hainan province saw a -29.3% year-on-year slump in duty-free spending in 2024 from CNY43.76 billion in 2023 to CNY30.94 billion (US$4.23 billion), according to newly published Haikou Customs data. This was driven by a -15.9% fall in shopper numbers (not visitor numbers as reported in some mainstream media. Note: If a single traveller buys in, say, the China Duty Free Group and HTDF stores in Sanya, they count as one shopper) to nearly 5.68 million and depressed consumer sentiment.
Some 33.1 million duty-free products were purchased during the year, down -35.5% from 51.3 million in 2023.
The figures, revealed on 2 January, also reflect the sustained crackdown on daigou trading throughout the year. And they underline competitive pressures from overseas markets for the Chinese spend – notably Japan, where travel-related shopping benefited from a weak Yen.
The results need to be viewed in the context of healthy visitor numbers. According to state-owned Hainan International Media Center, preliminary figures show the island received 97.2 million visits in 2024, up +8% year-on-year. Of these, inbound visitors from outside China doubled to one million.
“With numbers like this, it’s little wonder that tourism saw visitors directly inject CNY204 billion (US$27.9 billion) – a year-on-year increase of +12.5%) into the local economy,” the report commented. “In particular, the huge rise in inbound tourists serves to demonstrate the strength of Hainan’s tourism market.”
Strength of the tourism market, yes. The duty-free shopping market, no. Hainan clearly retains a strong allure for Mainland citizens but a combination of the factors mentioned earlier, alongside a growing trend towards consumers favouring experiences over shopping has depressed retail consumption.
According to HiHainan, part of Hinews, The Moodie Davitt Report’s strategic partner in Hainan province, duty-free sales on 1 January, New Year’s Day, reached CNY130 million (US$17.8 million), representing 111,000 items purchased by 21,000 consumers.
Holiday spending has been spurred by the issuing of duty-free spending vouchers from December. HiHainan reported that CNY26 million (US$3.6 million) worth of vouchers have been issued in Haikou with further incentives planned for the critical upcoming Spring Festival holiday.
The report said that the Sanya Bureau of Commerce is issuing CNY74.5 million (US$10.2 million) in coupons to drive sales from late December to February. 🏝️
