The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that currently, duty-free shopping in China is still in the early stages of expanding stores, cultivating consumption habits, and continuing promotion of shopping facilitation. The current policy has completed the first round of key optimization in terms of sales targets, shopping quotas, and online reservations. There is still room for further deepening in the shopping process, delivery efficiency, category, and online and offline connections, and the policy dividends are expected to continue to be released. With the continuous improvement of brand and category supply and continuous optimization of fulfillment links, the shopping penetration rate is expected to rise steadily from a low level and transform into impressive new sales, further amplifying the collaborative value of leading companies in terms of brands, supply chains, membership systems, and port networks.
Cathay Pacific Haitong's main views are as follows:
The global duty-free and travel retail market continued to recover after the epidemic, and South Korea's experience has proven that tax exemption in the city can become the mainstream business format in mature markets
The global duty-free and travel retail market has continued to recover from its low in 2020, reaching US$74.1 billion in 2024, and is expected to maintain a steady growth trend from 2025 to 2028. Korea is one of the most mature duty-free markets in the world, forming a mature model of “local shopping+airport pickup”. In-city duty-free shopping has occupied a central position for a long time. In contrast, duty-free shops in the city account for more than 70% of sales, while duty-free shops in the city account for more than 70% of sales, duty-free shopping in China is still in the process of expanding policies and cultivating consumption habits. Referring to facilitation experiences such as “buy and pick up now” and “guarantee and pick up” tax exemptions on the outlying islands of Hainan, in the future, if the city's duty-free shopping continues to optimize reservation, delivery, payment, categories, and online and offline linkages, there is room for a gradual increase in shopping conversion rates.
The expansion of China's duty-free supply system has accelerated, and policy facilitation and inbound passenger flow restoration have jointly laid the foundation for growth
After 2024, the supply of duty-free shops in China will consist of the transformation of existing local stores, foreign exchange duty-free shops, and the addition of three new local stores. Key cities such as Guangzhou, Tianjin, Fuzhou, Chengdu, Shenzhen, Xi'an, Wuhan, and Changsha will set up new stores one after another. The new stores generally adopt the cooperative model of duty-free operators+local commercial/real estate/cultural tourism/airport resources, and are mostly located in core business districts or mature commercial complexes. At the same time, China's policies such as unilateral visa-free, mutual exemption agreements, and 240-hour visa-free transit continued to expand. In 2026H1, 88.02 million mainland residents left the country, an increase of 10.5% over the previous year, and 22.914 million foreigners entered the country, an increase of 20.4% over the previous year. The number of entrants and exits provided sufficient potential customers for tax exemption in the city.
The long-term space of the national duty-free market depends on the recovery of outbound passenger flow, expansion of store supply, shopping facilitation, and increased customer unit prices
The bank estimates that the number of qualified departing passengers in 2025 is about 47.118 million; assuming a 0.3% utilization rate of local stores and a customer unit price of 1,400 yuan, it corresponds to about 200 million yuan of duty-free GMV within the country. With the implementation of the new duty-free policy in the city, improved store layout, increased consumer awareness, and the optimization of port pickup links, the bank expects the 2026E/2030E duty-free GMV to rise to about 15.5/10.27 billion yuan; sensitivity estimates show that within the 2035E qualifying passenger flow, 8% to 18%, and customer unit price range of 1500 to 3000 yuan, the national duty-free market space is about 9.37 billion to 42.18 billion yuan, indicating that the scale of the industry is highly flexible in terms of penetration rate and customer unit price.
Risk warning: policy changes; outbound travel falls short of expectations; residents' willingness to spend falls short of expectations