Hainan’s burgeoning offshore duty-free sector has once again narrowed the gap with the world’s largest duty-free market, South Korea.
As reported, the Chinese island province’s offshore duty-free stores generated sales of US$9.47bn in 2021, an increase of 84 per cent year-on-year. The results include duty-free sales of US$7.94bn, up 83 per cent year-on-year, with the balance being accounted for by tax-paid sales.
While the South Korean market rose 15 per cent year-on-year in 2021 to US$14.74bn, that result came from a low base in 2020 when sales plummeted 38 per cent over pre-pandemic 2019 to US$13.2bn – just ahead of 2017 levels.
The pandemic-ravaged Korean duty-free channel was once again driven in 2021 by sales to foreign customers who generated 95.4 per cent of total revenue (up from 94 per cent in 2020). Almost all of that activity was through reseller activity to China.
The Hainan Provincial People’s Congress recently set an ambitious Hainan US$15.8bn sales target for its duty-free stores in 2022, an increase of 66.2 per cent on 2021.
