Martial Arts, 'Hainan Investment and Duty-Free Industry Entry Briefing' Held Online

Photo by Korea International Trade Association

[Asia Economy Reporter Kim Heung-soon] The Korea International Trade Association (KITA) announced on the 29th that it held an online 'Hainan Investment and Duty-Free Industry Entry Briefing.'

Co-hosted with Hainan Haikou Duty-Free Shop (HTDF) and the China Council for the Promotion of International Trade (CCPIT) the previous day, this briefing was organized to support Korean companies entering Hainan Province, which has rapidly grown into the world's largest duty-free zone since the COVID-19 pandemic.

According to KITA, since the outbreak of COVID-19, Chinese travelers who cannot travel abroad have concentrated in the Hainan region. Coupled with the Chinese government's favorable policies for Hainan's duty-free business, duty-free consumption in Hainan has increased significantly. In particular, as COVID-19 stabilizes recently in China, large-scale revenge spending by wealthy Chinese visitors to Hainan continues.

Hainan, located at the southernmost tip of China, is a representative resort area. When the economy sharply declined last year due to the spread of COVID-19, the Chinese government expanded the per-person duty-free purchase limit for domestic visitors to Hainan from 30,000 yuan (approximately 5.14 million KRW) to 100,000 yuan (approximately 17.13 million KRW). The single-item duty-free limit of 8,000 yuan (approximately 1.37 million KRW) was also abolished. Additionally, Chinese domestic visitors to Hainan can purchase duty-free goods online for 180 days after returning to the mainland.

As a result, sales at domestic duty-free shops in Hainan reached 32.7 billion yuan in 2020, a 127% increase compared to the previous year, and sales from January to February this year recorded 8.49 billion yuan, a 359% increase year-on-year. The average daily sales related to duty-free in Hainan this year reached 28 million USD (approximately 31.25 billion KRW).

Cho Hak-hee, head of KITA's International Business Division, said, "Hainan is designated as a duty-free zone for the entire island and will become a huge shopping hub for Chinese and overseas tourists. The association will provide relevant information and arrange consultations with the Chinese duty-free industry to help our companies successfully enter the Chinese duty-free market."