Total sales at Hainan's offshore duty-free stores in the first quarter of 2021 reached 13.6 billion yuan ($2.1 billion), a rise of 356 percent on the COVID-hit first quarter of 2020, Hainan Governor Feng Fei told guests at the China International Consumer Products Expo opening forum on Friday, according to the Moodie Davitt Report.

Consumer activity has recovered strongly, the governor said, noting that the implementation of Hainan's Free Trade Port project has driven demand as has the introduction of the enhanced duty-free shopping policy last July.

According to statistics from China's Haikou Customs, in the first quarter of this year, around 1.79 million people purchased 17.75 million items in the island province's duty-free shops during the quarter, up 176.8 percent and 327.7 percent year-on-year, respectively.

Last year, China raised the annual cap on zero import duty to 100,000 yuan for each traveler departing from the tropical island to encourage more spending.

By the end of 2020, offshore duty-free business in Hainan was worth approximately $5 billion, boosted by the enhanced shopping policy, said the report.

"I have witnessed the regular improvement to the offshore duty-free shopping regulations, including of course the major enhancement to the policy in July 2020. This was a game changer for the duty-free and travel retail industry not only in Hainan but for the world," said Martin Moodie, founder and chairman of the Moodie Davitt Report.