Beauty set to profit from relaxed limits on duty free in South China island

By Lucy Whitehouse

- Last updated on GMT

Hainan Island, off the southern tip of China
Hainan Island, off the southern tip of China

Related tags Retailing

As the power of tourist spending continues to boost beauty sales across Asia, Hainan, an island in southern China, has now reduced its limits on duty-free retail.

Following the newly relaxed policy on the island, which is a popular tourist destination, duty-free consumers are now able to make as many purchases as they like up to the value of 16,000 yuan (US$2,442).

Previously, visitors to the island would have been met with a lower spending limit of just 8,000 yuan, and a restriction on the number of items they could buy of just two a year.

The move to lower the restriction on duty-free spending in the island follows trials of different upper spending and purchasing limits in Hainan since 2011, and look set to boost beauty sales.

The move comes as part of China’s wider bid to make Hanain a world-class tourist destination by 2020, according to the Shanghai Daily​, and has been put in place by the State Council, China’s Cabinet.

Visiting for beauty

It was in 2012 that cosmetics were added to the list of permissible duty free purchases in Hainan, and by the end of 2015, sales revenue duty-free in the country totaled 16.5 billion yuan, with fragrance and cosmetics emerging as the most popular purchases.

Beauty is a proving a resilient industry despite the current economic uncertainty across Asia, and its continuing popularity in duty-free shopping baskets is one key factor for this.

According to recent market predictions, the global duty free market is forecast to reach US$73.6 billion by 2019, growing at a CAGR of 8.6%, with personal care at the forefront of these sales.

According to the data put forward in ‘The Global Duty Free Retailing’ market research report​ for the period up to 2019, the Asia-Pacific region will fuel growth in the global market, with sales reaching to US$37.6 billion in 2019.

This will be thanks to growing low-cost tourism and the further development and prevelance of duty-free retail spaces, the report predicts.

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