Hainan's special customs operations start strong as trade and sales surge

Hainan's offshore duty-free sector sees strong customer traffic and vibrant sales following the island-wide special customs operations. [Photo provided to chinadaily.com.cn]

China's island province of Hainan reported robust trade and soaring duty-free sales as it launched its island-wide special customs operations on Dec 18.

The landmark policy, which turns the entire Hainan Island into a special customs supervision zone, is designed to transform Hainan into a globally influential free trade port. The immediate data from Haikou Customs underscores the policy dividend, showing a seamless flow of goods under new tax benefits.

On the import front, customs supervised 360 million yuan ($50.6 million) worth of "zero-tariff" goods entering through the first line linking Hainan with overseas markets. Key commodities included crude oil and aviation materials. Meanwhile, goods moving to China's mainland processed in Hainan saw significant savings. For goods leaving the island via the second line, the customs boundary between Hainan and the mainland, 14.7 million yuan worth of processed goods — primarily medical devices, pharmaceuticals, and food — were sold domestically with 808,000 yuan in import tariffs waived.

The most dramatic surge was in consumer spending. According to statistics from the Sanya Municipal Bureau of Commerce, on Thursday, the total duty-free sales in Sanya reached 118 million yuan. On Friday, single-day sales for duty-free stores in Sanya amounted to 105 million yuan, reflecting a year-on-year increase of 45.8 percent. Since the beginning of the year, cumulative duty-free sales in Sanya have surpassed 20 billion yuan by Dec 19.

On Dec 18, China Duty Free Group's Sanya International Duty Free City welcomed over 36,000 visitors, marking a year-on-year increase of more than 60 percent, while sales surged 85 percent compared to the previous year.

"I specifically chose today to come to Hainan to experience the post-policy shopping," said a tourist surnamed Wang from Beijing, who was selecting electronic products at the Sanya International Duty Free City. "Now, not only are there more product varieties, but the in-store promotions are also very impressive." On the first day of the policy, many consumers like Wang flocked to the duty-free stores to shop.

"To welcome this historic moment of island-wide special customs operations, we began planning and preparing three months in advance, increasing our inventory to create a high-quality shopping experience for domestic and international travelers," a spokesperson from the sales department of the duty-free city said.

The duty-free shopping policy for offshore island travelers is one of the most popular policies of the Hainan FTP. To ensure its smooth launch on the first day of island-wide special customs operations, Haikou Customs has implemented innovative measures, including a centralized and automated document review process, low-altitude drone deliveries, and tiered supervision. These steps are designed to ensure timely shelf stocking and efficient distribution of duty-free goods, fully safeguarding the consumer shopping experience, according to the Port Supervision Division at Haikou Customs.

The market opportunities brought by the policy have also attracted more international brands to accelerate their expansion in Hainan. On Wednesday, the international high-end cosmetics brand SUQQU entered the Sanya duty-free market, opening its first store in China's duty-free channel at the Sanya Hainan Tourism Duty Free Shopping Complex, further enriching the matrix of high-end consumer brands in Sanya.