Consumers select cosmetics in a duty free store where products on many shelves are sold out of stock in Sanya, south China’s Hainan Province, May 17, 2011. Sanya has witnessed a soaring number of consumers in its duty free store since the state carried out a pilot tax-free program in the city on April 20. (Xinhua/Chen Wenwu)
No more than one month after its opening, Hainan’s duty-free shop, which opens to domestic tourists, has already attracted a dedicated crowd of shoppers, as well as a flurry of criticism directed at the shop’s management.
On Monday morning, tourists in the coastal city of Sanya flocked to the shop, only to find that all of its perfume and cosmetics were off the shelves and locked up.
"Why have they stopped selling us these goods so abruptly? Why couldn’t they inform us earlier?" tourist Chen Li said.
"I assume that they hope we will buy other items that aren’t as popular," Chen added.
The shop’s sales representatives excused the problem by saying it was caused by a "sales system breakdown."
"We need to wait for further notice from our supervisor," said one salesperson who requested anonymity.
Other employees, however, said that the sales suspension is intended to facilitate an upcoming remodeling project.
The duty-free shop, which opened on April 20, allows Chinese tourists to buy luxury goods that they would usually purchase in Hong Kong or abroad, where they can enjoy duty exemptions or refunds.
The program allows tourists and locals to enjoy duty exemptions on certain imported commodities worth less than 5,000 yuan (about 765 U.S. dollars) before flying to other destinations in China.
After deducting customs duties, value-added taxes and consumer taxes, the store’s products are usually 10 to 35 percent less expensive than those sold in other stores.
However, discrepancies between the explanations offered by the shop’s salespeople concerning the locked-up goods, coupled with incidents of poor-quality products being sold at the shop, have fueled criticisms of the shop’s management.
A tourist from Shanghai surnamed Fan visited the shop during the Labor Day holiday and bought several cosmetics. An expiration date on the exterior of one of the products said July 2013.
However, Fan was shocked to find that the same item was expired and unuseable when she got home.
"This indicates that the management at the duty-free shop is not responsible," said Wang Yiwu, an economic researcher at the Hainan University.
"If the shop is trying to cheat its customers, the management should bear legal responsibility," Wang said.
"The shop has already received so many complaints, even though it’s only been open for one month," said Sanya resident Zhang Li. "Who knows what will come next?"
The Hainan local government is currently attempting to build the tropical island into a world-class tourist destination. The duty-free shop is just part of its efforts to lure tourists from China’s mainland.
However, the shop’s recent problems have cast the island’s duty exemption program in a poor light, said Cao Xiren, director of the Institute of Social Science at Hainan University.
Cao said he believed that the shop needs to improve its management in order to restore its customers’ confidence and trust.
An efficient supervisory mechanism to regulate duty-free shops is necessary, said Wang Yongjun, a professor at the Central University of Finance and Economics.

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