(Yicai Global) Jan. 11 -- China’s southern Hainan province plans to introduce a mail delivery service to relieve the pressure on local duty-free stores as more domestic tourists are traveling to the island getaway to buy tax-exempt goods amid the global coronavirus pandemic, the 21st Century Business Herald reported today.

The policy will be announced soon and China Duty Free Group is already trying it out internally, the report cited a source close to the provincial government as saying.

China Post Group is helping Hainan develop the new system for its offshore duty-free products, which will allow direct deliveries to homes while also enabling customs supervision, the report said. Major duty-free store operators in Hainan have been connecting their inventory and logistics systems with this new scheme for the upcoming service.

The Chinese government hiked the duty-free shopping limit for Hainan on June 30, increasing the annual quota for travelers to the province to CNY100,000 (USD15,430) from CNY30,000 (USD4,630). The new policy also increased the number of duty-free categories from 38 to 45. Newly added classes include natural honey, tea, tablets, electronic consumer products, mobile phones, game consoles and alcohol.

Total sales at Hainan’s four offshore duty-free stores was CNY32.22 billion (USD5 billion) last year, a 128 percent increase on 2019, according to official data. The number of shoppers rose 30 percent to 5.2 million, and the number of products bought jumped 69 percent to about 30.9 million. The new system is set to offer a huge boost to the express delivery business.

At the moment, air and rail passengers buying duty-free products need to show their identity cards, boarding passes and pick-up vouchers when collecting items at airports or train stations on the day of their departure from the island, according to Hainan’s current offshore duty-free regulations.

Hainan’s duty-free shops briefly tried an online purchase and delivery service before, but it was suspended by the customs authorities as the information and supervision systems were inadequate.

Both SF Holding and Yunda Holding have previously cooperated with China Duty Free Group in logistics, but it is not known if the two companies will be involved in the new duty-free mail system.

Editor: Tom Litting