With international tourism not expected to return to pre-Covid levels until at least 2023 across APAC, duty-free retailers around the region are exploring new revenue streams in an effort to keep the industry going.
According to GlobalData retail analyst Vijay Bhupathiraju, finding new revenue streams, especially from Chinese customers, is crucial for the duty-free market – and the Chinese and South Korean governments have set a strong example for other leaders in the region to follow.
For example, after the Chinese Government removed all purchase caps and tripled the annual limit on duty-free purchases in the Hainan Province to CNY100,000 per person, the province’s duty-free operator, China Duty-Free Group, recorded growth of 127 per cent during Q1 2021.
“As demand for high-end luxury products continues, China’s decision to designate Hainan Island as a free trade port is a blessing for duty-free retailers who would have been struggling otherwise with significantly fewer international tourist arrivals,” Bhupathiraju said. “The move to take advantage of the ongoing restrictions and convert the domestic demand into offshore duty-free sales is beneficial to China’s duty-free industry.”