Luxury, Beauty Brands Flock to Hainan as Tourist Boom Continues

SHANGHAI — The third edition of the China International Consumer Products Expo, also known as Hainan Expo, kicked off on Tuesday in Haikou, the capital of Hainan Island, China‘s duty-free shopping haven.

As the first large-scale international expo after China’s reopening, the five-day trade fair showcased more than 3,300 brands from China and abroad, up from last year’s 2,800 participants.

Keen on keeping luxury spending onshore, Chinese authorities have been actively cracking down on Daigou and heavily promoting local retail hubs such as Hainan and Hong Kong.

According to official data, for the first quarter of this year, Hainan welcomed 26.8 million visitors to the island, an increase of 20.2 percent compared to the same time last year. Total tourism revenue increased 25 percent year-over-year to 53 billion renminbi, or $7.7 billion.

To further unleash consumption potential, the Chinese government revealed last month that Hainan will be permitted to establish its own international customs system by 2025, which means travelers can enjoy splurging on luxury goods and beauty products outside of the 12 existing certified malls.

To realize Hainan’s ambitious transformation into a duty-free paradise and the world’s largest free-trade zone, the local government has created incentives for Hong Kong-based companies to set up branches on the beachy island.

With boosting consumption the most important theme for this year’s Hainan Expo, luxury and fashion companies such as Kering, Richemont, and Burberry, and beauty conglomerates such as L’Oréal, Estée Lauder and Coty, showcased their commitment to Hainan’s duty-free business with their latest product offerings and retail innovations.

The most popular booths belonged to beauty companies, for highly practical reasons. At Estée Lauder, shoppers formed winding lines to receive generous samples from the U.S. beauty conglomerate’s 14 high-end brands, including Aveda, which made its recent duty-free market debut.

Last January, the company set up a travel retail office in Hainan after unveiling duty-free flagships for the Estée Lauder and La Mer brands in the market.

Coty is showing its commitment to the Hainan market by opening seven stand-alone boutiques for its key brands this year. The company plans to build out a network of 38 retail stores at the end of the first half of 2024.

At Coty’s pod-like booth, the company highlighted established brands such as Gucci Beauty, Tiffany & Co., and Chloé’s fragrance line.

Prestige skin care brand Lancaster’s Linge Princière line and the biotech skin care line Orveda also made their China debuts at the fair.

“Its [Hainan’s] business environment and policies are a clear differentiator in the global market,” said Caroline Andreotti, Coty’s chief commercial officer for luxury. “Its role as an important hub connecting China, APAC and the world means that Hainan presents great opportunities to introduce new innovations to Chinese consumers and huge travel retail business growth.”

Highlighting responsible consumption, L’Oréal China unveiled its Product Impact Labelling System, an initiative to provide consumers with transparent information on a product’s environmental and social impact.

“2023 marks China’s ongoing opening-up, and Hainan plays an important role in the high-level development. We will keep leveraging the strong spill-over effects of CICPE, to better serve Chinese travelers with more diversified products, and continue our commitment towards promoting sustainable consumption, to meet consumers’ higher demands towards ‘Consumption for Good,’” said Fabrice Megarbane, president of L’Oréal North Asia Zone and chief executive officer of L’Oréal China.

At Shiseido, the Japanese beauty conglomerate offered a taste of its latest travel retail experiences.

Highlights include a stand-alone pop-up shop for Clé de Peau Beauté, an immersive 3D virtual animation pop-up for MAC that showcased its travel retail-exclusive products, and an elegant shelf displaying Serge Lutens’ La fille de Berlin 10th Anniversary Limited Edition fragrance, launching for the first time in the Mainland China market.

In the luxury and fashion category, brands focused on promoting a lifestyle-focused approach apt for the tropical destination.

Making its Hainan Expo debut, Hugo Boss constructed a 3,230-square-foot pavilion that highlighted its latest spring and summer collections for Hugo and Boss. Easy suiting from the Hugo brand also made its China market debut during Hainan Expo.

In partnership with the Forestry Department of Hainan Province and Hainan International Business Council, Hugo Boss China is also committing 1 million renminbi, or $145,000, to Hainan Reform and Development Research Foundation to support the Ecological Restoration Project at the Yingge Ling, Hainan Tropical Rainforest National Park for the next three years.

Judith Sun, managing director of Greater China at Hugo Boss, said the company is aiming to localize its global sustainability goals to “further root ourselves into the China market.”

Next door at Dolce & Gabbana, the Italian luxury brand curated a carnival exploding with colors inspired by the Carretto Siciliano, or the Sicilian cart.

With Italy being this year’s guest of honor, the fashion house expanded its offering to include collaborations with Fiasconaro, a Sicilian winery, and Pastificio Di Martino, a Naples pasta maker.

Participating in the fair for the second year in a row, Dolce & Gabbana is showing its commitment to restoring its brand image five years after its China debacle.

Participating for the third time, Kering’s Chinese jewelry label Qeelin unveiled its Yin Yuan ring collection at the fair.

Inspired by ancient oriental thinking that illustrates moving love, the rings are embedded with a hidden red thread that symbolizes fateful romance.

Burberry unveiled its appointment of Chinese actor Chen Kun as its global ambassador at the fair. Chen made an official appearance at the expo to reveal Burberry’s gabardine-themed exhibition space, pop-up store and café.

As part of the brand’s commitment to supporting global conservation efforts, Burberry will continue to fund the protection and restoration of mangroves in Chengmai County in Hainan province.

After Hainan Expo, crowds will migrate north to the neighboring province of Guangdong, for the 133rd edition of the China Import and Export Fair, or Canton Fair, in Guangzhou, which will run from Saturday to May 5.

As China’s largest trade fair, Canton Fair will see more than 35,000 exhibitors from more than 200 countries, with a focus on the business-to-business sector.