Macau retailers upbeat despite Customs crackdown

Gavin Lipsith

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Shops at Macau International airport are continuing to enjoy strong growth despite recent restrictions placed on returning mainland Chinese travellers

Macau International airport's duty-free stores, operated by King Power Group, enjoyed a 34% increase in turnover in the first five months of 2005, according to China Daily Information Company. Sales were boosted by a 25% increase in passenger traffic, and retailers are confident that sales will grow by more than 30% for the full year, despite new restrictions on the spending of mainland Chinese passengers.

Chinese Customs authorities introduced new allowances for mainland China on July 1, forcing returning travellers to declare any overseas purchase of more than 5,000yuan ($604). However, shops at Macau have reported no negative effect so far, and some managers reported that the new allowance could encourage passengers to spend up to the limit, instead of well below it.

However, the new allowance could have greater effect as the disposable income of Chinese travellers continues to grow, and one shop manager predicted the ceiling could quickly become too low for them to make the luxury goods purchases they enjoy while abroad.

More than 40% of passengers using Macau airport are from Taiwan, 30% are from mainland China and the remainder are primarily from Japan, South Korea and southeast Asia.