“Hainan will be a pivotal priority for Cainiao in the coming years”
Cainiao Smart Logistics Network, the logistics arm of Alibaba Group Holding Limited, has announced its plans to launch seven weekly chartered flights designated for shipping international goods from Singapore to duty-free shops in Hainan’s Free Trade Zone via its traveling hotspots in Sanya and Haikou.
This comprises five weekly Haikou-Singapore direct flights and twice weekly Singapore-Sanya-Guangzhou flights. Both routes aim to provide cross-border logistics services for global beauty and luxury brands to enter Hainan, and also to help export domestic e-commerce goods to Singapore, enhancing trilateral trade between Singapore, Hainan and China’s Greater Bay Area (GBA).
Leveraging Cainiao’s advanced global supply chain capabilities and technologies, the imported goods will be able to arrive in Hainan from Singapore within 3 hours, and be ready for sale in duty-free shops within 12 hours after clearing customs and dispatched from the warehouse. Before these direct flights were launched, it normally takes two to three days to import goods to Hainan as they had to first land in Shenzhen or Guangzhou, before being transported to Hainan via trucks and ferries.
“This is our first foray into the Hainan Free Trade Zone and we have plans to launch more dedicated freight routes between Hainan and other countries to provide import and export merchants with faster, more efficient, and reliable logistics services, ” said James Zhao, Cainiao’s General Manager for Global Supply Chain. “Hainan will be a pivotal priority for Cainiao in the coming years, and we expect to open more direct cargo routes to link Japan, South Korea, Australia, New Zealand and Europe to Hainan soon.”
The launch of chartered flights between Singapore and Hainan aims to satisfy the booming demand for luxury brands in China, with consumption in Hainan increasing 244% between July 1st 2020 and April 6th 2021, compared to the same period last year.
In July 2020, the Chinese government tripled the annual limit for duty-free purchases to RMB 100,000 (US$15,500) per person, and removed a cap of RMB 8,000 for any single product as part of its free-trade port plan. In February 2021, Hainan offshore duty free sales rocketed to RMB 4.79 billion (US$736 million), up from RMB 3.7 billion (US$568.5 million) in January.
Furthermore, China is also positioning Hainan as a strategic free trade port, with several port developments underway, including Hainan’s capital, Haikou. Cainiao’s direct flights will allow businesses to leverage Hainan’s position as a major duty-free shopping hub as well as its facilities for consolidation of component products being brought in for additional work and assembly from ASEAN and beyond.