To move the duty-free shop business online, it takes slow time.
Editor’s note: This article is from the micro-channel public number “electricity suppliers Online” (ID: dianshangmj), Author: Yang mud baby, editor: Adams asked.
Seven days, 1.5 billion. This is the first long-term Spring Festival sales transcript submitted by Hainan after the implementation of the new tax-free shopping policy on outlying islands, with an average of 200 million+ per day.
Such popularity is like an expected result. On the eve of the Spring Festival, Hainan added 6 new duty-free shops on outlying islands. The new shops are both in Sanya and Haikou, and take into account the core locations of the city and the airport.
Opening at this node, of course, is the consumption enthusiasm of the Spring Festival-millions of tourists will rush from the inland to Hainan every year, creating billions of consumption. Judging from this year’s data, from February 11th to 17th, Hainan received 4,588,400 tourists and realized a total tourism income of 5.824 billion yuan.
Obviously, the opening of the new store marks a further step in the scale of duty-free, and it is also a turning point in opening up to a diversified market. Among the newly opened stores this time, 2 stores are owned by China Duty Free (referred to as China Duty Free), and the other 4 are operated by Hainan Development Control, Hainan Travel Investment, Shenzhen Freedom, and China Express.
Except for CDF, these 4 companies are all “newcomers” in the Hainan duty-free market. Behind these tax-free “newcomers”, you can still see the shadow of Internet giants. On January 30, when the Haikong Global Boutique (Haikou) Duty Free City opened, it was announced that Hainan Development Holdings Co., Ltd., Alibaba and Dufry, an international travel retailer, jointly created; Sanya Hai Travel Duty Free City opened on December 30 last year. JD International Duty Free Store also opened at the same time.
Tax-free licenses are sweet and delicious, and big manufacturers naturally don’t want to miss it, but unlike the Internet’s previous style of high-pitched, no one can easily take a big step under the tax-free policy and license rules. Internet platforms work together to exempt tax Business requires “slow” effort.
01 Dachang grabs a beach on Hainan Island
On January 30th, Haikou Riyue Square. This commercial plaza in the center of Haikou was more lively than usual because a new duty-free shop was opened in the Capricorn Tower in the East District.
The duty-free enthusiasm that has been lively in Hainan for more than half a year has been concentrated in Sanya before. This newly opened duty-free shop on outlying islands has also added some voice to Haikou.
The licensee behind this global boutique duty-free city of Haikong is Hainan Holdings, and Alibaba is among its partners.
According to public information, Haikong has cooperated with Alibaba and Dufry in the establishment of the duty-free brand supply chain of outlying islands, tourism retail service consulting, and online and offline new retail models. Among them, Dufry is a core category supplier service provider for duty-free cities. Alibaba provides duty-free new retail solutions for duty-free cities in terms of e-commerce operation experience, new retail technology capabilities, and global logistics network.
Local duty-free licensees set up a stand, and Internet platforms provide new retail solutions. This kind of cooperation is not an exception.
Sanya Hailv Duty Free City opened on December 30 last year. The licensee is Hailv Investment, and JD.com is also among its partners. JD.com also opened a JD International-Digital Electronic Duty Free Pavilion directly on the second floor of the Duty Free City, integrating logistics and supply chain capabilities into the consumption in this pavilion, as well as digital store operation technology. Compared with Ali’s model, JD’s cooperation More “lightweight”.
An employee of JD.com in charge of tax-free business told E-Commerce Online that JD.com began to increase its tax-free business in November last year. It has recruited personnel from international business lines such as global shopping to set up a team and report to JD International.
“In addition to temporary transfers, we will also hire people from companies such as China Freedom and Haiti for management.” The above-mentioned internal employee said.
From the perspective of the cooperation model of big companies, they are all expressing their strengths. Alibaba plays an operational role in the supply chain and digital new retail capabilities, while JD.com puts 3C digital, which it is better at, on the stage, and it is more of a product differentiation route.
“Internet companies have come in to make strategic losses, in order to seize the opportunity first.” An industry insider told E-commerce Online.
In fact, it is unknown whether e-commerce companies can directly obtain tax-exempt licenses. However, this does not hinder the enthusiasm and importance of the platform. On the one hand, with the return of high-end consumption to the country after the epidemic, tax-free business has gained popularity. This is an opportunity that every retailer does not want to miss. On the other hand, e-commerce platforms It occupies half of the cross-border consumption, and the tax-free sector is an area that the platform has not yet touched. Entering the market through cooperation with licensees has become an important way to complement its own business. After the model runs through, more opportunities can be found in the tax-free business that is still mainly offline.
As for Hainan’s tax-free cake, those who want to join the game have various paths and forms. For example, recently, SF Express announced the acquisition of some shares in Kerry Logistics because it is the first company to build a bonded logistics center in Hainan Free Trade Port. It has also established logistics partnerships with a number of duty-free shopping malls in Hainan. The layout in the duty-free market is the main factor that SF Express chooses to acquire.
02 200 million a day, tax exemption stirs up waves
On July 1st last year, Hainan’s new tax-free policy came into effect. The annual duty-free shopping quota for outlying islands was increased from 30,000 yuan to 100,000 yuan per person each year. Hainan has become synonymous with “buy, buy, buy”. Plus last yearIn the second half of the year, the re-planning from the duty-free license to the new store became the first step in the “onset” of the duty-free effect this Spring Festival.
Official data show that from February 11 to 17 this year, Hainan’s duty-free sales were about 1.5 billion yuan, and more than 200,000 shopping trips were received, doubling the number in 2019 before the epidemic.
Hainan’s tax-free market sells 200 million yuan a day. In comparison, Beijing SKP, the world’s highest-selling mall in 2020, has annual sales of 17.7 billion yuan, and average daily sales of 50 million yuan.
Behind the dazzling data of Hainan outlying island duty-free during the Spring Festival, multiple factors have been superimposed.
According to the “2021 Spring Festival Tourism Trend Report” released by Ctrip, the top three provinces and cities for travel are Hainan, Guangdong, and Shanghai; Sanya and Haikou have become the most popular cities for car rental and self-driving tours during the Spring Festival. At the same time, the price of economy class air tickets during the Spring Festival travel has dropped sharply. Among them, Sanya-Shanghai has dropped by 70%, which provides a destination for this year’s “originators”.
Another very important reason lies in the diversified layout of Hainan’s duty-free and diversified categories including electronics, porcelain, and alcohol.
At the end of last year, Hainan was approved to add 6 new duty-free shops, and the operating entity added 4 new entrants to the CDF. This means that Hainan’s duty-free industry is moving from a dominant position in the industry to moderate competition.
From the way of picking up the goods, you can feel the quiet change of the duty-free pattern. In addition to China Duty Free, the duty-free goods purchased at 4 duty-free shops of Hainan Travel, Haikong Global Boutique, China Service, and Shenzhen Freedom are packaged by Hainan Digital Trading Company for passengers to pick up the goods at a delivery window. Based on this, passengers only need to distinguish between two windows, CDF and non CDF, when picking up goods.
But as a new player who is just starting out, there is still a gap with CDF. Consumers Leo have a deep feeling about this: During the New Year, before opening every day, there is a long queue in front of the Sanya Haitang Bay International Duty Free Shop. The average queue time for luxury brands such as Gucci and Burberry is about 5 to 15 minutes. Even if the passenger flow is restricted, it is still crowded. And the newly opened Hailv Duty Free Shop basically does not need to queue up, and the goods are all available.
“It is still the gap caused by not enough brands and not enough goods. Many brands in Hai Travel Investment are still decorating, and there is a sense of desertedness.” Leo said to E-commerce Online.
In fact, CDFG, which occupies 90% of the duty-free market, is already very complete in terms of operations and the supply chain of goods. For newcomers including Hai Travel Investment and Haifa Control, the Internet Platform cooperation is also a very necessary supplement.
03 Difficulties and worries of tax-free internet access
In interviews with many people in the tax-free industry, they all mentioned the pressure of the policy. Tax-free business is far from easy as expected.
AlthoughBoth belong to cross-border business, but duty-free and cross-border products are essentially different. Cross-border products are only exempted from customs duties, while duty-free products are exempt from value-added tax, customs duties, and consumption taxes. Therefore, you can do cross-border merchandise business, but you may not necessarily be able to sell duty-free products. Obtaining a license is the stepping stone.
And every business link involves government, customs and other levels of negotiations, which also makes Internet platforms appear cautious about the layout of duty-free business, far less vigorous than community group buying.
The license has undoubtedly become a constraint on the Internet platform. E-commerce platforms that have performed outstandingly in cross-border trade actually have strong operational capabilities. From supply chain and logistics to product selection and digital construction, although they cannot be exempted in person due to license restrictions, they have In the cooperation of the card side, it is completely possible to exert their abilities.
On the other hand, the duty-free shops themselves are also going online. After the epidemic, Rishang and CDF Member Shop both opened online stores, allowing you to directly purchase goods and mail them home; at the same time, Rishang and CDF Member Shop also launched an invitation-based mini program this year. Invited consumers can These two small programs place orders, and the prices are similar to those at the airport’s daily duty-free shops. Now, this online ordering model is almost everywhere in every duty-free shop brand. You can place an order directly online just by entering the traffic information of the outlying island.
(Various tax-free applets)
But the drawbacks of this online shopping are also obvious. A consumer admitted to “E-commerce Online” that there are no new notifications on the Mini Program or App, and he needs to keep an eye on it, and often sees the event and it is out of stock , And the shopping cart checkout will be stuck, and deleting the goods is also very troublesome.
Many experience details also show that online shopping is more like an online tool for duty-free shops, and it has not yet realized the new retail logic of connecting goods in a true sense.
Unlike a brand that opens a Tmall flagship store, a brand or service provider operates an online store and can sell goods through the platform. In offline duty-free shops, not everything can be moved online. Some brands still reject “online”. This is largely due to the existence of “physical” between offline duty-free shops and their own mainstream channels. “Interval, once online, online tax exemption is likely to have a huge impact on the main channel of taxable goods, which may have an impact on the brand’s own price management, supply system, and agency sales system.
“We are continuingWaiting for the license opportunity for duty-free daily necessities on the island, mainly for local consumers, this is a new field. “The above-mentioned insider said, but it is still unknown when the new license will be approved.
For major manufacturers, there are opportunities for the new retail transformation of duty-free businesses, and there are also thresholds. Compared with their usual highs, they may only proceed cautiously on this matter.