A spectacular night view of China Duty Free Group’s Sanya store
China Duty Free Group (CDFG) has reported further extraordinary sales at its Sanya Bay store on Hainan Island for the 2012 Spring Festival, underlining the dramatic success of China’s offshore duty free shopping policy since its introduction in April 2011.
"The exceedingly strong market performance of Sanya Duty Free Store went far beyond the expectation of many market experts,” CDFG commented.
Severable favourable factors contributed to that outstanding performance, it said. The Year of the Snake Spring Festival was the first Golden Week since the implementation of the enhanced offshore duty free policy, which increased the allowance from RMB5,000 (US$800) to RMB8,000 (US$1,275) in late 2012.
As already revealed by The Moodie Report, CDFG’s Sanya store posted sales of RMB130 million (US$20.8 million) for the key Spring Festival period (10-15 February), driven by over 126,000 visitors.
The store also achieved a new daily sales record on 14 February (Valentine’s Day), driven by a themed promotion and an opening period of 39 hours straight starting the previous day. Sales on the day were RMB28.98 million (US$4.64 million), more than double the RMB12.9 million (US$2.06 million) achieved last year.
Today CDFG told The Moodie Report that average daily sales during the Spring Festival reached RMB21,855,000 (US$3.5 million) and that the average number of people entering the store each day was over 20,000.
"The popularity of Sanya Duty Free Store soared and the sales were extraordinarily high,” said a spokesperson. “On the second day of the Lunar New Year, the daily revenue of Sanya Duty Free Store surged to RMB20,180,000 (US$3.2 million), which broke the record of RMB12,900,000 (US$2.06 million) from a year earlier.
"Large numbers of tourists came to Sanya Duty Free in groups and almost all of them bought some duty free articles,” CDFG said. “The counters for perfume and cosmetics were packed with tourists as usual, and the newly introduced brands such as Benefit, Shu Uemura, Givenchy, Coach, Ralph Lauren and Ernest Borel provided more choices for the tourists.
"The daily sales of the third, fourth and fifth days of the Lunar New Year reached RMB22,570,000, RMB22,810,000 and RMB28,980,00 (US$3.59 million, US$3.60 million and US$4.61 million respectively)."
Sales on the fifth day of the Lunar New Year (14 February), driven by the Valentine’s Day promotions, represented, as mentioned, an all-time daily high.
CDFG said: “The 2013 Spring Festival is a significant moment for both Hainan and Sanya. Many sources were watching Hainan in terms of the overall performance of the tourism market during the period.
"The new offshore duty free policy and the implementation of measures to improve the service quality of Hainan’s tourism market – and promoting the construction of the international tourism island concept – are included in many administrative policies formed at the People’s Congress and the Political Consultative Conference which closed just before the Spring Festival.”
The strong efforts by Hainan province to increase tourism through promoting the new duty free policy has also paid rich dividends, the company noted. “Sanya Duty Free experienced a leapfrog growth attributable to the tourism peak as well as the policy effect,” said CDFG.
It said that many tourists had made the decision to enjoy their Spring Festival vacations in Sanya after learning of the increased duty free allowance.
CDFG said it was encouraged by the new offshore duty free policy and motivated by the overall quality improvement in Hainan’s tourism industry. As a result it has expanded the Sanya Duty Free store, acquiring an additional 3,000sq m before the Spring Festival. The new area features a high-quality gift zone, a children’s brand area, and a food offer.
The promotional activities will continue for some time after the holiday period, CDFG said.
"Sanya boasts not only an incomparable tourism environment and natural scenery but also Sanya Duty Free store, the world’s fourth-biggest and China’s first duty free store,” it said.
CDFG said that the introduction of offshore duty free in Hainan has enriched the image, allure and reputation of the Hainan tourism market. Duty free shopping is fast becoming a key driver for travel to Hainan, it concluded.
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