Policy shift propels duty-free shopping in Hainan

China Duty Free Group opens its 7th Hainan Duty-Free Shopping Festival in Sanya on July 4. [Photo provided to chinadaily.com.cn]

Duty-free shopping in Hainan province has surged since a major policy overhaul in 2020, with sales hitting 195.8 billion yuan ($27.3 billion) over the past five years, customs data shows.

The boom follows the province's move to triple the annual duty-free shopping quota for travelers to 100,000 yuan and expand product categories to include electronics and luxury goods.

From July 2020 to June 2025, nearly 28.6 million shoppers purchased 240 million duty-free items on the island, marking increases of 123 percent and 289 percent, respectively, compared to the previous five-year period, according to Haikou Customs.

"Six years ago, I almost gave up buying a 50,000-yuan watch here because of 10,000 yuan in taxes," said a tourist surnamed Li from Hunan province. "Now, with the higher quota, I can buy everything I want in one trip."

Authorities have streamlined logistics and customs checks to keep up with demand. A new drone delivery system, the first of its kind in China for duty-free goods, has cut shipping times, while automated customs clearance has sped up approvals by 60 percent.

"We were initially concerned about storage and logistics pressure as our duty-free product range expanded," said Zhang Bin, general manager of the Sanya International Duty Free Shopping Complex. "But thanks to optimized customs clearance processes, goods arriving in the morning can now be on shelves by afternoon."

Retailers are now targeting summer travelers with family-friendly promotions. China Duty Free Group, which operates six Hainan stores, is blending shopping with family tourism and entertainment, including a Care Bears-themed pop-up and interactive events.

Analysts say the policy shift has cemented Hainan Free Trade Port's status as a shopping hub, though challenges like global travel reopening loom.