Han Ximin

1824295095@qq.com

SHENZHEN'S duty-free shopping sector has witnessed a significant increase in popularity and sales, which is attributable to a rise in passenger traffic due to the 144-hour visa-free policy. The sector is predicted to continue expanding thanks to supportive government policies.

During the two-month summer travel season, a notable surge in passenger traffic has been observed at Shenzhen’s exit and entry checkpoints, driven by the visa-free policy and a boom in cross-border holiday trips.

Data from the Shenzhen General Station of Exit and Entry Frontier Inspection show that over 42.7 million inbound and outbound travelers crossed the border with Hong Kong in the two months ending Aug. 31, reflecting a substantial year-on-year increase of 25.6%. Notably, on Aug. 25, the daily count peaked at 977,000, marking the highest single-day record since the border fully reopened.

Fueled by a blend of supportive policies and market demand, the interest of international travelers in China remained strong. Between July 1 and Aug. 31, more than 838,000 overseas travelers transited through Shenzhen’s checkpoints, a notable 61.5% increase compared with the previous year.

Among these travelers, over 410,000 were inbound international travelers, including those from countries such as the United States, Malaysia, the Philippines, Japan, and South Korea, who came for tourism, trade, and family visits.

Among inbound international visitors, over 106,000 enjoyed visa-free entry, a 7.8-fold increase year on year. Approximately 16,000 individuals benefited from the 144-hour visa-free transit policy and the 144-hour visa-free group tour policy, representing a 45% increase.

Surge in sales at

duty-free shops

The rollout of the 144-hour visa-free policies that facilitated border crossings has resulted in a marked uptick in sales at duty-free shops at Shenzhen’s checkpoints.

As per data from the Shenzhen Bureau of the State Administration of Taxation, sales of tax-refundable goods for outbound travelers in Shenzhen soared to 126 million yuan (US$18.26 million) in the initial half of the year, increasing by 23 times compared to the same period last year, with a total tax refund amounting to 11.29 million yuan.

In a move to further bolster tourism and spur consumer spending, Central authorities issued a notice, effective from Oct. 1, permitting eight cities, including Shenzhen, to establish downtown duty-free shops.

Under this new policy, outbound travelers, including Chinese nationals, departing from the Chinese mainland by air or international cruise within 60 days can avail themselves of duty-free benefits. The downtown duty-free shops will mainly offer a variety of portable consumer goods such as food, clothing, bags, shoes, electronics, perfumes, cosmetics, and high-value-added products. Travelers can make purchases at these downtown shops and retrieve their items at the checkpoint they depart from.

During a recent interview, Zhang Yong, a researcher at the Futian Economic Development Promotion Association, said, “The downtown duty-free shops will attract more international tourists to spend as ‘China travel’ gains global popularity.”

Zhang also highlighted that this initiative could boost the export of Chinese cultural products since these downtown duty-free shops are encouraged to showcase trendy Chinese products, including specialty items with independent brands that effectively promote traditional Chinese culture through their businesses.

Compared with the duty free shops at checkpoints, downtown duty-free shops provide consumers with greater flexibility, allowing them to make purchases up to 60 days before departure with no limits on purchases. Shoppers can collect their items at duty-free shops in the designated area for outbound travelers at the Shenzhen airport or via cruise ship.

Apart from duty-free shops at the Shenzhen airport and the Shekou Cruise Homeport, the Shenzhen Duty Free Group operates duty-free shops at major checkpoints.

Instant tax refund

Additionally, a new pilot program has been running at 23 stores within The MixC shopping mall in Luohu District since December of last year. This program aims to provide instant departure tax refund services to overseas shoppers.

Overseas travelers, as well as compatriots from Hong Kong, Macao, and Taiwan, who meet the necessary conditions for the departure tax rebate can now receive refunds directly from participating stores after purchasing eligible tax refund items.

Traditionally, tax refunds during departure were processed either at the airport or the cruise ship port. However, with this innovative approach, overseas shoppers are able to receive their refunded value-added tax in renminbi (yuan cash) on the spot.

This process requires shoppers to present sales invoices and complete an application form as per the guidelines. Notably, this new policy allows overseas tourists to utilize the refund for further purchases during their visit.

Presently, over 200 stores have been authorized to engage in the sale of tax-refund products for outbound travelers. Moreover, the city’s taxation and commerce bureau has commenced the selection process for an eighth batch of such stores.

During the first seven months of this year, Shekou customs has reviewed and approved 1,820 tax refund applications at the Shekou Cruise Homeport. This is a significant increase of nearly 24-fold compared to the previous period, with the total refund amount reaching approximately 18.64 million yuan.

Convenient payment

Shenzhen has also released a list of 10 business circles offering convenient payment services targeting international travelers in the city. This includes prominent shopping locations such as the Shenzhen airport, The MixC World mall in Nanshan, The MixC Shenzhen Bay, Sam’s Club Futian Store, Sam’s Club Qianhai Store, Dameisha Outlets, and the Costco Longhua Store.

Data provided by the Shenzhen branch of the People’s Bank of China indicate that in the first half of 2024, foreigners in Shenzhen executed 66.8 million non-cash transactions amounting to 8.7 billion yuan. This reflects a notable year-on-year surge of 85% and 100%, respectively.

Shenzhen is also developing payment service hubs around major transportation nodes such as airports, checkpoints, and high-speed rail stations. For instance, the Shenzhen airport now hosts six foreign currency exchange points, eight ATMs capable of handling withdrawals made with foreign bank cards, and three terminal devices designated for digital currency exchanges.

Q & A

Q1: What documents are required to purchase duty-free goods?

Passengers who have completed customs exit formalities and are about to travel abroad, as well as inbound passengers who have not yet completed customs entry procedures, may purchase duty-free goods at airport duty-free stores.

When purchasing duty-free goods, inbound and outbound passengers must present their transportation receipts (such as boarding tickets) and their valid entry and exit documents.

Q2: Is there a limit to the quantity and price of duty-free goods that can be purchased per person per flight?

Passengers who purchase duty-free goods at the time of departure must adhere to the relevant regulations of the country of arrival. According to Chinese regulations, the total amount of duty-free purchases made by a resident traveler at the duty-free stores at the ports of entry, together with those made outside of China, shall not exceed 8,000 yuan. The amount of duty-free purchases made outside of China shall not exceed 5,000 yuan.

Q3: May I use foreign currencies to pay for duty-free goods?

All products at duty-free stores are priced in RMB. Payments can be made in RMB, U.S. dollars, Hong Kong dollars, euros, and Japanese yen cash notes, as well as with various mobile payment apps, credit cards, and debit cards.

Q4: Should I purchase items when leaving the country or coming back?

Both are acceptable options. Duty-free stores can be found in both the departure and arrival halls of the airports.

The duty-free departure shops also provide the “reserving duty-free goods and collecting them at the arrival hall upon return” service. To collect the reserved duty-free goods, passengers are required to present their return boarding pass, similar to the procedure for purchasing duty-free items at the departure and arrival duty-free stores.