The Number Of Duty-Free Shops In Hainan Will Increase To 9 Before The Spring Festival

Under the night sky, several high-rise buildings in Sanya Hongzhou square are gorgeous, and the huge signboard Sanya International duty-free shopping park has been lighted, which means that the first duty-free shop in Hainan will be opened soon.

The 21st century economic reporter obtained information from sources close to the Hainan provincial government, confirming that China Service's qualification for tax-free operation on outlying islands has been approved by the relevant state departments, along with Shenzhen state-owned tax-free Co., Ltd. The first duty-free shops of the two companies are located in Hongzhou square in Sanya and Guanlan Lake Resort in Haikou.

"The requirement is that four stores must open before the year." The source told the 21st century economic reporter. In addition to the above two, the four duty-free shops also have the first stores in Hainan, which are respectively set up by hailv investment and Haifa control. The arrival of new competitors announced that the island duty-free market will change greatly from 2021. The most intuitive change is that the number of duty-free shops available to tourists has changed from 4 to 9.

Behind the new license plate

December 30 is a big day for Sanya, when three new duty-free shops open. Sanya International duty-free shopping park, hailv duty-free city of Hainan lvtou duty-free products Co., Ltd., and Sanya Phoenix Airport duty-free shop of China immunity group all chose to appear on this day.

Before that, Hainan had not officially announced any news of the new island tax-free license. How could the new duty-free shop suddenly open?

Reporters learned from many interviews that behind this is a rather tortuous story.

In August this year, Hainan announced two new offshore tax-free licenses, and Hainan tourism investment and duty-free products Co., Ltd. (a subsidiary of Hainan tourism investment and Development Co., Ltd., hereinafter referred to as "hailv investment") and global consumer boutique Hainan Development Trade Co., Ltd. (subsidiary of Hainan Development Holding Co., Ltd., hereinafter referred to as "Haifa control") received new tickets.

Soon, two more companies were approved by the Hainan provincial government through bidding, namely, China Service tax-free and Shenzhen free. In the middle of September this year, the economic report of the 21st century was immediately reported. At that time, people in the industry thought it was settled.

However, the pause button was pressed when the four companies reported to the relevant national ministries and commissions for approval. Until the end of December, the relevant national ministries and commissions finally released. The above-mentioned people close to the Hainan provincial government disclosed to reporters that Hainan Province received the Ministry's approval last week, formally notifying China Service tax exemption and Shenzhen exemption to obtain the qualification of tax exemption for outlying islands.

A senior tax-free official who did not want to be named explained to the reporter that there were so many new competitors, and individual departments and experts had objections. The reason lies in the fact that the strength of the four new companies entering the market is quite different from that of the CMAC group, and the tax-free channel capacity is limited. Therefore, most of them choose to cooperate with foreign investors, and some of them also involve equity cooperation. The relevant departments think that the tax-free industry is franchised and should not be joint venture. However, the Hainan provincial government has always stressed the need to be more open. "In the end, I don't know how to solve it. In short, the Ministry has released it." The source said.

According to the 21st century economic report, Sanya duty-free shop of hailv Investment Co., Ltd. cooperates with ragdale and DFS, while Haifa control Sun Moon Plaza Shop cooperates with dufry, and Shenzhen exempts Guanlan Lake duty-free shop from cooperating with DFS. An unnamed person in the industry said that due to the fact that enterprises newly granted the qualification of duty-free operation in outlying islands want to open duty-free shops in a short time, there is great pressure on the establishment of teams and the purchase of duty-free products, and cooperation with large-scale duty-free suppliers can quickly obtain the supply of goods. According to its introduction, compared with the purchase from large duty-free merchants, the direct purchase cycle of brand will be longer, the requirements for the team are higher, and the capital occupation is relatively high. However, due to the lack of middlemen, the price of duty-free products will be more advantageous. Therefore, in the later stage of development, general duty-free shops will prefer to choose brand direct purchase.

After the admission of new players, the number of enterprises with tax-free business license in Hainan Island has increased to six. Among them, China tax exemption, maritime tax exemption, China Service tax exemption and Shenzhen tax exemption are all experienced veterans who have been immersed in China's tax-free industry for many years. Hailv investment and Haifa control are newly established tax-free enterprises in 2020. The feast of new and old players is about to kick off.

New market pattern of tax exemption in Outlying Islands

Compared with a year ago, the competition pattern of tax exemption in Hainan Island has changed greatly at the end of 2020. Previously, there were four duty-free shops on Hainan Island, which were located in Haitang Bay, Sanya, Boao Forum for Asia scenic spot in Qionghai City, Haikou Riyue square and Meilan International Airport. The operation rights of the four duty-free shops on the islands were directly or indirectly controlled by the central immune system. Now, the situation of "one family dominating" in China immunity group has been broken.

However, Chen Guoqiang, the general manager of China immunity group, has repeatedly said in public speeches that China immunity welcomes competition. "Hainan is a very attractive market, not only for Chinese tourism retailers, but also for global tourism retailers, it is a place that can bring commercial benefits." Chen Guoqiang said at the recently held world duty free association's "reborn China" theme activity, under the competition, China immune group will also have new business model to cope with this situation, such as improving the management ability of stores and other measures to enhance competitiveness.

"No matter how many new stores are added, they are based on the principle of moderate competition that the state has always emphasized." Wang Meng, Jessica's Secret CEO, believes that from the perspective of generous needle, the state emphasizes the development of tax-free to attract consumption return. Through this state of sustained and moderate competition, the competitiveness of Chinese tourism retailers can be enhanced, including the ability to expand overseas in the future.

For the positioning of "international tourism consumption center", the moderate competition of tax-free in outlying islands is also an important step for Hainan duty-free industry to move towards international standards. According to the announcement on the tax-free shopping policy of Hainan Island passengers jointly issued by the Ministry of finance, the General Administration of customs and the State Administration of Taxation on June 29, encouraging moderate competition is the guiding spirit of Hainan's tax-free industry, and the policy specifies that business entities with the qualification of duty-free products distribution can participate in the duty-free shopping in Hainan Islands according to the regulations. In the bidding announcement issued by Hainan Provincial Finance Department, commerce department and Market Supervision Bureau, it is also clearly pointed out that the newly added tax-free shopping business entity in Hainan outlying islands will be selected and determined by means of market-oriented competition, such as bidding, following the principle of keeping business brand, variety, price and international synchronization.