Urban duty-free shops in mainland 'unlikely to affect Hong Kong retail'

Wallis Wang

The mainland's new policy to establish more urban duty-free shops is unlikely to significantly affect Hong Kong's struggling retail sector, according to lawmaker Peter Shiu Ka-fai.

Shiu, representing the wholesale and retail sector, said this policy primarily targets overseas tourists and does not benefit mainland visitors, who make up 80 percent of Hong Kong's inbound tourists.

Starting October 1, mainland authorities will open urban duty-free shops in eight cities, namely Guangzhou, Chengdu, Shenzhen, Tianjin, Wuhan, Xi'an, Changsha and Fuzhou.

Currently, there are only six urban duty-free shops in the mainland, located in Beijing, Shanghai, Qingdao, Dalian, Xiamen and Sanya.

Also, 13 existing foreign exchange duty-free shops in major cities such as Beijing, Shanghai and Harbin will be converted to urban duty-free shops.

These stores will cater to travelers leaving the mainland via flights or cruise ships within 60 days.

Tourists can shop in these cities and collect their purchases at designated pickup points at the border.

All items must be taken out of the mainland in a single transaction and tourists cannot leave items at the border for later pickup.

The urban duty-free shops will mainly sell portable goods and are encouraged to feature domestic products that promote Chinese culture.

Shiu told The Standard that these new shops would not diminish Hong Kong's reputation as a "shopper's paradise," as the majority of visitors to Hong Kong cannot utilize the mainland's duty-free stores.

"Mainlanders cannot benefit from these new shops, which cater to foreign tourists eligible for tax refunds," he added.

"Currently, some 80 percent of tourists visiting Hong Kong are from the mainland and they can enjoy the duty-free allowance in Hong Kong."

Also, Hong Kong residents might consider visiting mainland duty-free stores, but they will likely compare prices before making a decision, he added.

The duty-free shopping allowance for mainland tourists in Hong Kong has recently increased to 12,000 yuan (HK$13,100) from 5,000 yuan.

Shiu indicated that stakeholders will continue to monitor the situation closely.

wallis.wang@singtaonewscorp.com