Chinese authorities have given the green light to a revised pick-up policy for offshore duty-free goods purchased in the coastal province of Hainan, which is set to take effect from 1 April, as announced by the General Administration of Customs, Ministry of Finance and General Administration of Taxation on 21 March.
Two methods have been added to the current pick-up regulations, including “Guaranteed pick-up” and “Buy now and pick-up now”. A total of 15 product categories are eligible for this new rule, ranging from cosmetics and perfume, to shoes and hats, and infant formula milk powder, although items such as watches and jewellery, wine and spirits are excluded.
Consumers from outside Hainan who buy listed duty-free products at physical duty-free outlets with a valid identity or travel documents and information of leaving the province will now be able to apply for these new methods. While the “Buy now and pick-up now” option is applicable for purchases whose unit price is under 20,000 RMB (2,905.33 USD, exclusive), it is also in accordance with the requirement of the limited quantity of each category per head. Passengers can pick up the products on-site. There is no inspection of physical goods at the Customs upon departure.
Duty-free goods with a unit price tag of more than 50,000 RMB (7,263.32 USD, inclusive) that is purchased by an individual before departure from the island can be picked up under the “Guaranteed pick-up” option. These items, however, cannot be used on the island. To return the guarantee for purchased goods when leaving Hainan, passengers are required to apply to Customs for verification that the duty-free goods are not used or consumed together with proof of purchase of the goods and valid identity or travel documents.
Given that the Island currently sees its per-capita duty-free consumption stand between 7,500 (1,089.50 USD) to 10,000 RMB (1,452.66 USD; with a total allowance of 100,000 RMB, or 14,526.65 USD per year), according to Duty-Free Retail Expert, a Chinese online publication with a focus on duty-free industry, the new rules, especially the method of “Buy now and pick up now” will “help drive immediate consumption by tourists to the island and further stimulate their spending”.
Prior to the new regulations, consumers could only order items and retailers had to package and deliver them to designed self-collection points at the airport or seaport before customers’ departure. By allowing “an instant sense of ownership”, and simplifying the pick-up process, which is usually the most looked-forward-to part of the whole shopping experience, the implementation of these new rules will further increase the appeal of the duty-free heaven, and bolster the overall growth of the duty-free sector.