The strong increase of duty-free shopping on Hainan Island (China) is the reason why e-commerce group Alibaba Group Holding has upgraded its logistics network.
In the context that Chinese people cannot travel abroad to shop, in 2020, Beijing has extended the exemption to allow domestic tourists to buy duty-free goods up to 100,000 yuan / year ( $1,645/year) on Hainan Island, up from 30,000 yuan previously.
Accordingly, revenue from duty-free sales on Hainan Island has doubled in 2020 to 27.4 billion yuan.
This figure is expected to reach 60 billion yuan in 2021 and possibly up to 100 billion yuan in 2022.
However, officials of Cainiao, Alibaba’s smart logistics network, did not disclose how much it would invest in Hainan but said it would develop a new one. backgroundA smart logistics service platform to integrate customs clearance and supply chain management, and build a central warehouse for luxury goods, fragrances, pharmaceuticals and cold goods.
Cainiao will also work with local governments to expand air and sea routes with the Hong Kong Special Administrative Region (China), Japan, Korea and Europe.
This week, Cainiao launched a full-service cargo flight, operating five days a week, between Singapore and Haikou, the capital of Hainan.
Headquartered in Hangzhou (China), Cainiao handles an average of 5 million parcels per day from its two main domestic warehouses and overseas warehouses such as Belgium, Malaysia, Thailand, and the United Arab Emirates. most (UAE).
Speaking at the Global Smart Logistics Summit in Hangzhou, Alibaba Chairman, and CEO Daniel Zhang said that the COVID-19 pandemic has accelerated the digitization of the logistics industry, due to Online shopping and delivery demand surged.
In the financial year ended March 31, Cainiao recorded a growth of 68%, despite generating only 27.3 billion yuan, or 5% of Alibaba’s total revenue. This is higher than the 58% growth in the previous financial year.
Hainan Island is currently home to 10 duty-free shops with a total floor space of about 210,000 m2, with the presence of about 650 international brands, including Estee Lauder, Cartier, Bulgari, and Tiffany & Co., up from about 100 brands a year ago.