DFNI Providing all the latest news on the travel-retail industry with interviews, editorials and more
Hainan is clamping down on daigou activities in an effort to help the long-term vitality of duty free on the island.
The new rules clarify the parameters of tax-free shopping and set out the circumstances under which a person or an unincorporated organisation may enter a list of “seriously untrustworthy entities”.
The regulations were set out by the Standing Committee of the Sixth People’s Congress of Hainan Province and will come into effect on 1 January 2022.
The list will be published on websites such as Credit China (Hainan) and the National Enterprise Credit Information Disclosure System (Hainan) and will be accessible for three years.
For legal persons and corporations who enter the list specifically, the consequences could be severe, including banning them from participating in construction projects invested by the Government, restricting their access to Government preferential policy support and banning them from applying for financial capital projects, along with restriction from participating in commendation awards and revoking other relevant honours.
For people on the list, duty-free shopping will be off-limits and they will be banned from engaging in any work related to the operation of duty-free commodities, while their qualifications for appraisal, awards, honourary titles, recommendation for admission to higher education etc. will also be revoked.
Credit agencies will also be able to collect information about daigou activities for subjects on the list, while banks and insurance companies will be able to increase loan and mortgage interest rates.
Commenting on the news, Rocky Chi, Head of Planning at Emerging Communications said: “Although daigous always find ways to operate, there is going to be at least some impact because Chinese consumers understand the new regulations.
“If a daigou continues to sell large amounts with a lower price, it is likely consumers may believe they are selling fake products resulting in loss of trust. Right now it is hard to tell how big an impact the rules will have.”
