CHINA. Hainan offshore duty free sales rocketed to RMB4,790 million (US$736 million) in February, up from RMB3.70 billion (US$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 RMB1.4 billion (US$216.5 million) in the peak period 11-17 February. Total sales, including tax paid items, reached RMB1.5 billion/US$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 RMB5,785 (US$889) in February, rising to RMB7,000 (US$1,075) for 11-17 February. That was short of the H2 2020 average spend of RMB6,676 (US$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 RMB8,490 million (just above US$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 (RMB6,766 million) and 2020 (RMB7,494 million). The sector is well on course to shatter 2020’s full-year total of RMB27,476 million (US$4.22 billion – pure duty free) well before year-end.
With offshore duty free business mainly focused around the two key cities of Haikou to the north and Sanya in the south, passenger traffic information regarding Haikou Meilan International Airport and Sanya Phoenix International Airport is of interest. Some 1,316,000 departing air passengers were handled by the two airports in February, 715,000 of them in Sanya, 601,000 in Haikou.
Those numbers were down -34% and -52%, respectively, on the pre-COVID comparison month of February 2019. The declines were linked to the early 2020 COVID-19 outbreaks in parts of northern China, which restricted travel.
