Hainan Two Sessions: Martin Moodie’s view on Hainan FTP

By Moodie Davitt Report / hiHainan / Updated: 2021-01-22,20:11

Last year Hainan’s island departure duty-free sales exceeded 32 billion yuan, and this year Hainan will achieve even greater breakthroughs. Since the Moodie Davitt Report has always been very interested in China’s tax-free business and has given a lot of attention and active support to Hainan’s island departure tax-free policy, we invited Martin Moodie, Founder and Chairman of The Moodie Davitt Report, to share his opinions on the achievements that Hainan’s duty-free industry has made and its projected future development.

In the interview, Martin Moodie spoke highly of the performance of the Hainan island departure duty free industry in 2020. He said: ”For Hainan’s island departure duty free market to not only recover to 2019 levels, but to go racing past them represents a triumph on every level – a triumph for the retailers concerned (notably the China Duty Free Group) but also a triumph of official policy, a policy that was rightly geared towards benefiting the Chinese consumer and the Chinese and Hainanese economy.”

In the past six months, many new changes have taken place in Hainan's island departure duty free industry. The most obvious is that moderate competition has made substantial progress, and new market players have entered one after another. Currently, Hainan has 5 market players and 10 duty-free shops. Of the six new stores, three in Sanya opened on December 30 last year, and three in Haikou are also scheduled to open in the near future. In his opinion, the proliferation of Duty Free licenses on Hainan is broadly a positive development for the market in that it will provide additional competition and therefore an incentive for all retailers to raise their standards and to bring a wider variety of products and concepts to Chinese customers. He thinks it is very important that each retailer differentiates their offerings so that it is not a ‘one size fits all’ approach. However, he also thinks it is important to avoid ‘overkill’ in terms of new licenses. So he believes that a measured level of new competition – spread across the whole island – is good, but that it should not get out of hand.

For the future development of the duty-free industry in Hainan, he also gave some advice: “Whenever you get such rapid growth as one has seen in the Hainan duty free industry; you will get some teething problems. Inevitably, for example, with such large crowds coming to the stores or pre-ordering, you will get longer queues and some logistical delays both in-store and with pick-up at the airport. The global lesson is that adept use of technology can assist in improving consumer convenience. Secondly, Hainan’s retailers can learn a lot from their international counterparts in terms of the quality of staff training. This is absolutely critical – having well informed staff who understand the products and services on offer will truly benefit every travel retailer on Hainan and will help the consumers a lot.”

Finally, he expressed his hopes of returning to Hainan as soon as possible from his base in Hong Kong, China. He is delighted to be so geographically close to the single greatest duty free hotspot of the third decade of the 21st century! He also looks forward to seeing the rapid qualitative evolution of island departure duty free trade on Hainan as well as of course, a continued surge in business levels.

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