Pilot project triggers buying spree for luxury items on opening day

SANYA, Hainan - The opening of a duty free store in Sanya, Hainan province, on Wednesday has grabbed the attention of shoppers across China, many of whom will be relishing the prospect of being able to purchase luxury imported goods at competitive prices without embarking on long trips abroad.

Shoppers wait to pay for their cosmetics products at the duty free store in Sanya, Hainan province, April 20, 2011. [Photo/Xinhua]

By 7 pm on Wednesday about 14,000 customers had visited the 7,000 sq m store that offers 18 types of imported commodities, including jewelry, handicrafts, watches, perfumes and cosmetics.

The launch of the pilot duty-free project is another step by the provincial government to build the island into a more attractive tourist destination for both foreign and domestic visitors.

"We have been hearing about these good deals for months," said Wei Qinan, a tourist from Jiangxi province. "Now, it's real and I am thrilled," she said.

China's southernmost island province hopes to take advantage of its "4S" reputation - sea, sand, sunshine and now, shopping.

Before the store even opened for business at 10 am, members of staff were preparing for 16 tourist groups that had made reservations.

Shoppers wait in line outside a Gucci shop as the duty free store opens in Sanya, Hainan province, April 20, 2011. [Photo/Xinhua]

A crowd was also waiting anxiously outside the door, eager to hunt bargains.

"I was in Hong Kong when I heard the news that duty-free shopping was going to be launched here, so I didn't buy any luxuries," and took a plane to Sanya, said Wei.

She purchased cosmetics valued at 2,410 yuan ($370) and estimated that she saved at least 30 percent on prices in her hometown.

"I will come here again and tell my friends to buy duty-free products if they fly to Hainan for holidays," Wei said.

Teng Rui, the store manager, said they were gearing up for the large crowds expected over the 3-day Labor Day holiday from April 30.

"We have sufficient stock to meet expected demand," Teng said.

China International Travel Service (CITS) added duty-free shopping to their Hainan tour schedules.

"We have added duty-free shopping to all our tour packages to Hainan and will arrange regular shopping-themed tours in the future," Zhang Lingjie, deputy director of the domestic tour department at CITS in Beijing, said.

Zhang added that each tourist enrolled in the package would be rewarded with a discount coupon of 150 yuan at the store, plus a free drink.

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Ten tourist groups flew from cities including Shanghai and Beijing to Sanya on Wednesday afternoon and headed straight to the store.

Ctrip, one of China's largest travel portals, signed a contract with the China Duty Free Group, manager of the Sanya facility, and offered their customers discount coupons worth 100 yuan and a free drink.

"I've already put the Hainan shopping tour on my must-do list for this year as I don't have enough money to go abroad for duty-free goods," said Zhou Lihua in Shanghai.

Hotels near the store are preparing for an influx of guests.

"Dozens of people have called the hotel since the beginning of April and the number of bookings have increased dramatically since last week," said Zhang Shuzhen, from Intercontinental Sanya Resort.

Airline companies, too, are expecting growing demand for Sanya flights.

"We definitely will add extra flights to meet the demand," said Luo Zhuping, Board Secretary of China Eastern Airlines.

The pilot program sets a rebate cap on commodities worth no more than 5,000 yuan for each purchase.

Eligible tourists, 18 years and older, can purchase tax-free commodities twice a year, while island residents can purchase commodities once a year.

Customers have to fill in their personal details and purchase a shopping card from the cashier before buying and the duty-free products are available for collection at the airport in Sanya. Tourists have to finish shopping at least six hours before flight departure.

Despite the store's expected success, experts believed that Hong Kong's preeminent position will not be under threat.

"I don't see a very serious impact since we need to consider the motivation of tourists choosing their destinations. Mainland tourists come to Hong Kong not only to shop but also for cultural events and entertainment. Hong Kong has its unique attractions that cannot be replaced," said Qu Xiao, assistant professor at the School of Hotel and Tourism Management at Hong Kong Polytechnic University.

Liu Xiaoli and Joy Li contributed to the story.