By Li Hanqing & Wang Nian, Institute of Market Economy, DRC

Research Report, No.17, 2021 (Total 6082) 2021-2-10

Abstract: In the context of the rampant COVID-19 pandemic across the world, it is hard for Chinese tourists to spend money abroad and it looks difficult to change the picture in the short term. As a result, many consumers’ eyes have turned to shops at home, leading to a rapid expansion of China’s domestic duty-free retail market. Compared with market performance in some other countries, China’s duty-free market is still plagued by a series of problems. For instance, the market environment needs to be more lively, the prices and product items need to become more attractive, the duty-free market needs to play an adequate role in promoting domestic brands, and the pattern for market competition needs to be reshaped. For future efforts, we need to grasp the opportunity of consumption reflux to enrich the environment of duty-free retail market through creative policies for promoting duty-free consumption. Restrictions on duty-free products need to be lifted to different extent type by type, in a bid to shift the “items plus volumes” mode to a consumption volume-based management mode. Domestic goods should be encouraged to enter the duty-free market. The market access and exit mechanisms need to be improved by adopting separate administration measures in terms of the licenses. Digital technology needs to be bolstered for creative application to duty-free retail market. Besides, duty-free retail market needs to be merged with tourism and relevant sectors in order to develop new growth drivers for high-quality consumption.

Keywords: consumption reflux, duty-free retail market, new domestic products, market access