Hainan Duty-Free Spending Plummets 29% Amid Economic Weakness
Duty-free spending in Hainan, China's renowned shopping destination, fell sharply by 29.3% in 2024, according to local customs data released on Thursday. Shoppers spent 30.94 billion yuan on luxury goods, a significant decline compared to the previous year, coinciding with a 15.9% drop in visitor numbers to 5.683 million.
This downturn presents a challenge for international luxury brands like LVMH and Kering, who were eager to capitalize on a post-pandemic consumer boom that saw a surge in sales to 43.76 billion yuan in 2023. The slump in spending has raised concerns regarding plans to transform Hainan into a comprehensive duty-free shopping zone by 2025, where brands would independently manage their stores rather than depending on local partnerships.
The decrease in domestic consumer spending comes after a brief period of "revenge spending" following COVID-19 restrictions. Growth in overall retail sales was just 3.0% in November, falling short of analysts' expectations. Chinese officials have indicated a push to boost consumer spending in the upcoming year.
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