Q&AQ. Is reselling of duty free goods still permitted on Douyin? A. Yes. But only via 1) a duty free licence-holder’s authorised replenishment site; 2) Cross-border ecommerce retailers registered in Hong Kong which open stores on Douyin. Any unauthorised reseller sourcing their goods from Hainan Duty Free or direct from abroad is now barred from the site. So unlicensed ‘domestic merchants’ (i.e. Mainland-based) cannot use the platform for reselling. Q. What about licensed duty free retailers? A. Yes, they can use Douyin in two ways: 1) For duty free pre-order and 2) To sell tax-paid products |
CHINA. Chinese social media platform Douyin – the country’s equivalent of TikTok – has banned non-licensed merchants from reselling duty free products purchased in Hainan or offshore, effective 31 March, according to a report in Chinese professional cosmetics media Qeyes.
The report noted that under Douyin’s revised regulatory provisions, “domestic merchants” which sell ‘overseas goods’ to consumers through secondary sales (other than general trade) violate the regulatory policy on cross-border ecommerce retail imports.
‘Secondary sales’ are defined as 1) either shipping the products from overseas or domestic bonded zones or 2) transporting them directly from abroad to the domestic market.
The new policy also bans non-licensed domestic merchants from engaging in any promotional activities (including online promotion or offline advertising suggesting that they can ship directly from overseas or bonded zones) and mandating that their products must include labels in Chinese.
Hainan’s offshore duty free shopping policy, introduced in 2011 and the subject of several enhancements since, permits only licensed duty free retailers on the island to sell duty free goods.
“This means that going forward when advertising products, [Douyin] sellers cannot advertise to consumers that the products are from Hainan duty free shops unless they have the corresponding qualification or licence,” the report said.
Commenting on the news, one source told The Moodie Davitt Report: “The new rules are all about stopping the unofficial reselling business. For the licensed retailers in Hainan, there is no impact. For companies registered in Hong Kong who have opened stores on Douyin, also no impact.”
Another source commented: “It will be interesting if other platforms follow suit – Taobao and others. Then it will be a huge hit.” He said that if that becomes the case Korean duty free – heavily reliant on the daigou trade into China – might be seriously affected.
A third industry executive said: “Perhaps it is the beginning of the end for unregulated Daigou. Will be an interesting space to watch.”
