(Yicai Global) July 29 -- Chinese brands are looking to enter local duty-free stores to sell more products to shoppers hunting for tax-free luxury goods.

Many Chinese manufacturers are seeking opportunities to enter duty-free shops, and some of them are having negotiations with retailers, Yicai Global discovered during the second China International Consumer Products Expo in Hainan province, known for its preferential tax policies.

One of the companies is Pingyao Tangdu Push Light Lacquer which is displaying its lacquer teaware and vases at the expo. The firm is talking with some duty-free stores about selling its products there, Qin Dan, a sales manager, told Yicai Global.

Store operators can sell excellent domestic products as a way of differentiated competition to diversify their offering, an insider at Hainan Development Holdings, which operates airport and duty-free stores, told Yicai Global.

Tax-free stores have advantages in policy and market so it is possible for commodities with high tax rates such as perfumes, cosmetics, as well as beverages to enter duty-free shops, according to Hainan Development. Some of the domestically produced goods that the firm’s Global Premium Duty Free Plaza is selling include drinks and Fiyta watches.

But it is not easy to join store shelves full of foreign products. Tax-free stores are not a conventional channel to sell domestic products so it takes time for manufacturers to learn how to do it, the insider added.

Still, inclusion is allowed. China will have domestic products sold in certain areas of duty-free stores, which should help domestic brands go international, the National Development and Reform Commission said in a document released in March 2020.

Zhuhai Duty Free Group, one of the major tax-free retailers in China, has formed partnerships with more than 100 domestic brands, Yicai Global learned from the Guangdong province-based firm.

Hainan’s 10 offshore duty-free shops earned CNY60.2 billion (USD8.9 billion) in sales last year, almost doubled from a year ago. Duty-free sales totaled CNY50.5 billion, up 83 percent. China's share in the global duty-free market climbed to 28.8 percent in 2021 from 14 percent in 2019.

Editors: Emmi Laine, Xiao Yi