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More China duty free licences ‘expected to come’, TRMarketplace panel hears

Additional duty free licences in China ‘will come’ but it remains unclear how procedural and qualification requirements for applicants might apply, according to Stephen Peng, Senior Partner at Jincheng Tongda & Neal Law Firm.


Speaking during the China and Korea Market and Consumer Analysis webinar held today (30 September) at TRMarketplace, Peng concurred that it is likely further Chinese government policies could emerge that relax rules on foreign duty free operators entering China’s burgeoning duty free market, but not before more licences are issued first to China companies.


In a rich and incisive session sponsored by KPMG held at 9:00 (UK time), viewers were reminded that the last of China’s seven duty free licences – approved by the Chinese government as part of expansion plans for duty free – were issued in 2011.


HAINAN: HUGE GAINS IN FIRST 88 DAYS

Three alone have been issued in 2020, with more than 10 public companies applying for the licences.


Viewers also learned from Peng that total duty free sales at duty free ‘hotbed’ Hainan Island soared by 230% to total approximately RMB8.3 billion in the 88 days since the offshore duty free allowance ceiling was raised in July to RMB100,000/$14,700. This equates to approximately RMB100m in sales per day.


A flurry of discussion took place during the session on the juggernaut DF&TR markets of China and South Korea, with debate spanning new duty free licence issuances in China, airport commercial contracts in South Korea, the restriction relaxation on the allowance limit in Hainan (as mentioned) and shifting purchasing drivers buoyed by new technologies.


In addition, Anna Marchesini, Project and Business Development Director, m1nd-set shared exclusive data on pre- and post-covid shopping behaviours for the China and Korea markets.


Among a number of critical insights, m1nd-set revealed that 79% of Chinese travellers would be willing to travel by air once again within the first six months of international travel bans lifting.


In turn, m1nd-set added that Chinese shoppers are more likely than the global average [shopper] to continue purchasing without altering their shopping behaviours at all.

Eudes Fabre, CEO, North Asia at Lagardère Travel Retail, which boasts a formidable network of duty paid stores across China, commented: “We don’t see a fundamental change in Chinese consumption habits [post-Covid].


“Recovery in spend has been quicker than we expected… We were hit badly and early on but we recovered quickly and very strongly and we are now ahead of where we were last year.”


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Originally published: https://www.trbusiness.com

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