On October 8, China Duty-Free Group released its financial figures for the first three quarters of 2023. The numbers revealed robust growth for the company, with a reported revenue of 508.37 billion RMB (69.72 billion USD), marking a 29.14% rise compared to the previous year.
In the third quarter alone, the company recorded a revenue spike of 149.79 billion RMB (20.54 billion USD), an increase of 27.87% year-on-year. Meanwhile, the net profit stood at an impressive 13.33 billion RMB (1.82 billion USD), a massive 93.19% uptick from the previous year.
One highlight of the Group’s Q3 activities included the successful launch of its offshore duty-free shopping festival in Sanya. In collaboration with six Hainan regional stores and Sinopharm’s duty-free store, the festival featured over 800 domestic and international brands across a diverse range of categories.
According to the Group, this sudden surge in revenue can be attributed to a combination of several factors. Firstly, the company capitalised on the recovery of the domestic tourism sector this year propelled by the State Council’s initiatives to bolster and widen consumer spending. Another reason is that, while continuing its dominance in the Hainan duty-free market, the company also advanced its footprint in major transportation hubs like Beijing and Shanghai.
For years, China has been working to redirect luxury spending domestically, with Hainan being the focus of policies designed to encourage duty-free shopping. Amid the COVID-19 disruptions, Hainan emerged as the go-to duty-free shopping locale, especially when international travel was restricted.
As the Chinese government plans to leverage duty-free shopping to boost domestic consumption, urban destinations such as Shanghai, Guangdong, and Guangzhou are witnessing rapid growth in duty-free outlets. This is further propelled by many Chinese tourists choosing domestic shopping destinations over global hubs such as Paris, London, and New York.
Considering the pronounced preference of Chinese consumers for luxury items and their propensity to spend more in duty-free settings, projections suggest China could dominate Asia Pacific’s duty-free landscape, potentially accounting for an overwhelming 87% by 2027.
