Outlying Islands Tax Exemption Policy Strengthens Hainan to Initiate a “Buy, Buy, Buy” Model for the Chinese New Year Holiday |

Original Title: Outlying Islands Tax Exemption Policy Strengthens Hainan to Initiate a “Buy, Buy, Buy” Model for the New Year Holidays. Source: Securities Daily

Our reporter Xiang Yantao

As the Spring Festival approaches, Ms. Liu, who lives in Wuhan, has already started a “holiday mode.” On February 3, she flew to Sanya with her son, preparing to “shop, shop, shop” while enjoying the sun, the beach, and the sea.

“We would travel abroad at this time in previous years. Now we cannot go abroad. Sanya has a good environment and the epidemic is well controlled. The most important thing is that we can visit duty-free shops. With cheap air tickets, we will come some days before the Chinese New Year holiday … ”Ms. Liu told a reporter for the Securities Daily.

In fact, since the implementation of the new tax exemption policy for the outer islands in July last year, Hainan has long become the best choice for many people in the country for leisure and vacation, and the Hainan’s duty-free consumption has also continued to rise. On February 4, the spokesman for the Ministry of Commerce, Gao Feng, presented that according to customs statistics, the total annual sales of the Hainan Duty Free Islands in 2020 were 27.48 billion yuan, a year-on-year increase of 103.7%; the real number of tax-free purchases was 4,484 million, a year-on-year increase of 19.2%; the number of purchases was 34.1 million, a year-on-year increase of 87.4%.

Outlying Islands Tax Exemption Policy Continues to Improve

According to a report by the Hainan Province Commerce Department, in January this year, the total sales of nine duty-free stores in Hainan Province were 4.05 billion yuan, an increase of 168% year-on-year. tax-free shopping and the number of tax-free shopping achieved substantial growth.

On January 31 this year, Haikong Global Boutique (Haikou) Duty Free City and Shenzhen Mission Hills Duty Free City Haikou officially opened two duty-free stores in the outer islands, with sales of 23.518 million yuan and 3.143 million yuan respectively. in the first day. So far, there are 9 duty-free stores in the outlying islands of Hainan province, including city stores and airport stores. In addition to CDF and HSFG (CDF Holdings), the province’s outlying islands tax-free business entities have also added Hai Travel Investment, Haikong Global Boutique Company, China Service and Shenzhen Freedom, and market entities are becoming more various.

The preferential policies for the tax-free islands are also constantly updated. On February 2, the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation jointly issued the “Announcement on Increased Tax-Free Purchasing and Collection Methods for Passengers from Hainan Outlying Islands”, in which it was proposed that outlying island passengers could choose to pick up the goods by mail when purchasing goods duty free; Island residents before leaving the island Buy duty free products, you can choose to return to the island to pick them up. Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council have also published the “Action Plan for the Construction of a High-Level Market System”, which proposes to improve the policy of guidance of the return. consumption abroad; increase the number of cities and duty-free shops in the Hainan Islands.

“The opening of the mail is without a doubt a great benefit for our sales of porcelain and other crafts.” An official from China Service Duty Free Shop told the “Securities Daily” reporter that porcelain, watches and other handicrafts introduced by China Service Sanya International Duty Free Shopping Park are duty free on other islands. What the store doesn’t have includes the Hemmler and Cuckoo series of watches, a specialty product from the Black Forest in Germany, and Wedgwood, a centuries-old high-end porcelain product from the UK. At present, China Service Sanya International Duty Free Shopping Park has taken the lead in opening the duty-free mail service. Not only can tourists send the goods directly home, but island residents can also choose to pick them up after returning to the island.

Listed company Nuggets Hainan duty free market

With the continual upgrade of the outlying islands duty-free policy, Hainan’s duty-free consumer market has expanded rapidly, and Hainan has also become a place for major listed companies to “hunt for money.”Free chinaThe recent release of the 2020 annual performance report shows that during the reporting period, the company achieved a total operating income of 52.618 million yuan, an increase of 8.24% over the same period last year; Net profit attributable to shareholders of listed companies was 6.117 billion. yuan, an increase of 32.07% over the same period last year. The “Securities Daily” reporter estimates that CDFG’s net profit in the fourth quarter of 2020 will increase by 582%.

Regarding the reasons for the growth in performance, China Duty Free stated that it was mainly due to the implementation of the Hainan Islands Duty Free Policy on July 1, 2020. The company’s duty free business in the Outlying Islands achieved significant year-on-year growth, especially for luxury suitcases, suitcases and suitcases with higher gross profit margins. Sales of watches and precious jewelery increased significantly year-on-year.

According to the “Securities Daily” reporter, in June last year, China CDF’s acquisition of 51% of Hainan Duty Free Products Co., Ltd. completed the capital transfer and industrial and commercial exchange registration. CDFG currently owns 4 duty-free shops on the outlying islands in Hainan province, including the Sanya Haitang bay duty-free shop, the Haikou Meilan airport duty-free shop, the Haikou square duty-free shop Riyue, Qionghai Boao Duty Free Store and 2 additional Sanya Duty Free Store Experience Store.

China Duty Free told the “Securities Daily” reporter that the company’s current projects in Hainan include the international duty-free city of Haikou. In addition, after the T2 terminal of Haikou Meilan airport comes into use, a duty-free shop at the airport.

In fact, in addition to China’s main duty-free CDF, several publicly traded companies are “hoarding” Hainan’s duty-free market through equity participation and investment. January 15,WangfujingThe ad said that the companyHainan RubberSigned an investment cooperation agreement to invest in the establishment of a duty-free products operating company and a daily duty-free products operating company, which will be used to develop and operate the duty-free projects on Hainan Island and for daily use. free products and manage tax free products.

On the night of January 25Really at home(An announcement was issued to disclose a number of matters related to Hainan Province’s duty-free operation, including a wholly owned subsidiary of Hao Ran Home and Hainan Travel Investment Heihu Technology Co., Ltd. agreed to establish a joint venture. Hainan Travel Investment Juran Daily Consumer Goods Duty Free Co., Ltd., together in Haikou The store is engaged in duty-free daily consumer goods operations. At the same time, the wholly-owned subsidiary of the house of the house of Sanya’s Mall has leased approximately 47,000 square meters of property for the establishment of a duty-free sea travel city and the development of business support services. Travel Duty Free City is now the islands’ largest duty-free shop outlying areas in the urban area of ​​Sanya.

Tax-free businesses should improve service quality

In the opinion of industry insiders, Hainan’s introduction of the outlying island tax exemption policy will undoubtedly help promote the return of consumption abroad. Wang Peng, an assistant professor at Renmin University of China, told a Securities Daily reporter that as incomes for Chinese residents rise, the proportion of people with outgoing consumer needs will increase even more in the future, and the market tax-free consumption space is very large. In the context of the current global epidemic, the risk of going abroad and the degree of problems are increasing. Hainan integrates leisure, vacation, health and shopping. Multiple factors have jointly promoted the return of consumption abroad.

But Wang Peng also pointed out that at present, the different duty-free shops in Hainan still have a low level of competition, with a high degree of homogeneity. “Not all had their own characteristics. Different duty-free stores, different geographic locations and different types of brands have different field settings and different related characteristics. The main duty-free stores can operate in all categories, but they should highlight their characteristics. Otherwise, it will be easy to repeat low-level competition, fight the price war, “said Wang Peng.

According to Bai Ming, deputy director of the International Market Research Institute of the Ministry of Commerce, the tax exemption policy of the outer Hainan islands is still in the introductory period. More importantly, in the future, thanks to the stimulus of the outlying island tax exemption policy, Hainan’s attractiveness as a hub for international tourism consumption will gradually increase. Greater stimulus to local consumption.

“The Hainan International Tourism and Consumer Center is a set menu. Tax-free shopping is just an accompaniment in this set. We should also look at many main dishes, such as the tourism business carried out, the main body of operations, the number of tourists and tourism projects. These are comprehensive strengths. Only one plate can improve overall competitiveness to make the whole package profitable, “Bai Ming told the” Securities Daily “reporter.

In Bai Ming’s view, the lure of tax exemption and holidays overlap. Hainan has controlled the epidemic from very early on. This year’s Spring Festival will obviously benefit the development of Hainan’s tourism industry. However, the foreign epidemic will one day be brought under control, and everyone will return to the same starting line in the future. At that time, the competition will be the quality of service and overall competitiveness. For listed companies that invest in tax-free businesses, it is necessary to improve the quality of service, implement differentiated competition and achieve differentiation of products and services.