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Hainan Free Trade Port Tourism Retail White Paper: Insights and Future Directions

The Airports Council International (ACI) released the 2023-2052 World Airport Traffic Forecasts (WATF), showing a positive outlook for global air passenger traffic over the next three decades. The forecasts suggest that by the end of 2024, global passenger traffic will surpass pre-pandemic levels. As one of the largest markets, the Asia-Pacific region achieved a scale of $33.4 billion in 2022, accounting for more than half of the global duty-free sales, with significant growth in markets like China and South Korea.

As travel increases and Chinese outbound tourism accelerates, the Asia-Pacific region is expected to perform strongly in 2024. Hainan's offshore duty-free industry hailed as one of the greatest success stories in global travel retail of the 21st century, started from a single store in Sanya in 2011 and has now grown into a multi-billion-dollar enterprise with the world's largest duty-free store.

According to the annual Moody Davitt Global Leading Travel Retailers Report, China Duty-Free Group (CDFG) under China National Travel Service (HK) Group Corporation has topped global sales for three consecutive years, outperforming strong competitors like Avolta Group (Dufry), Lotte Duty-Free, Lagardère Travel Retail, and Shilla Duty-Free.

Hainan Leading the Charge

The Asia-Pacific region remains a significant player in the duty-free market, accounting for over half of global duty-free sales in 2022. China's Hainan offshore duty-free sector has been particularly successful, with sales reaching RMB 43.76 billion ($6.13 billion) in 2023, a 25.4% year-on-year increase. This success is attributed to the island's unique duty-free policies and its appeal as a top tourist destination.

In 2020, despite the pandemic, CDFG was the only leading travel retailer to achieve growth, bolstered by Hainan’s offshore duty-free policies and strategic business operations. The opening of the CDF Haikou International Duty-Free City, a comprehensive tourism retail complex featuring shopping, dining, and entertainment, has significantly enhanced the international reputation of Hainan's duty-free sector. In 2023, Hainan attracted 90.0062 million domestic and international tourists, with a 188.6% increase in passenger turnover and a 71.9% year-on-year growth in tourism revenue, showcasing Hainan's strong appeal as a global tourism consumption centre.

Evolving Consumer Trends

  • Millennials vs. Gen Z Consumption Patterns

Millennials and Gen Z consumers exhibit distinct purchasing behaviors. Millennials prioritize quality and brand value, often making cautious buying decisions due to financial pressures. In contrast, Gen Z consumers, who are more attuned to digital trends and price sensitivity, show a higher willingness to spend on entertainment, fashion, and beauty products.


  • Rise of the "He Economy" and High-Quality Singlehood Consumption

Traditionally, tourism retail has been dominated by female consumers. However, male consumer power is rising, with significant purchasing activity noted online. According to QuestMobile, male users make up 50.5% of the internet population, indicating their growing influence. Single consumers, particularly those highly educated and career-oriented, are driving demand for high-quality, personalized products.

  • Luxury Market Stability and Experiential Consumption

The global luxury market remains strong, with high-income consumers demonstrating resilience against economic pressures. In 2023, brands like Hermès reported notable revenue growth, reflecting stable demand. Concurrently, Chinese consumers are shifting towards experiential consumption such as eco-tourism. In Hainan, the free trade port status has attracted international luxury brands, boosting its status as a luxury shopping destination. With new policies and flagship stores, Hainan's luxury sales are expected to significantly increase by 2025, driven by higher spending limits and an expanded product range.

The Integration of Duty-Free and Cultural Tourism

Hainan is leveraging its duty-free policies to create a unique cultural tourism experience. The "duty-free + cultural tourism" model aims to attract both domestic and international tourists by combining shopping with cultural and entertainment events. This strategy has proven effective, as evidenced by the significant economic impact of events like the Jay Chou concert, which generated substantial tourism revenue.

Future Prospects for Hainan's Tourism Retail Market

With continuous improvements in tax policies and infrastructure, Hainan's tourism retail market is poised for sustained growth. The island's strategic initiatives to enhance its duty-free offerings and integrate cultural experiences are expected to make it a premier destination for global tourists and investors alike.


Reach out to us for more insight or strategies on how these trends can make your business a key player in the Chinese market, or download the full report HERE.


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