Brands look to China's tropical duty free island paradise for consumer comeback
14/04/2023 06:00
By Casey Hall
HAIKOU, China, April 14 (Reuters) - Representatives of
over 3,000 brands including Burberry and Estee Lauder descended
on China's Hainan this week to show off their latest wares,
hoping to cash in on a post-COVID consumer rebound that has
kicked off on the island known for its duty free shopping.
Around 300,000 people are expected to visit the China
International Consumer Products Expo in Hainan between April
10-15 in what is seen as a comeback for the holiday destination,
after it was badly hurt last year by China's tough COVID-19
curbs, including a lengthy lockdown that stranded thousands of
tourists there.
The province, known at home as the "Hawaii of China", has
since 2020 become a major shopping destination in the country as
Beijing pushed its travel retail status. It especially boomed
during COVID, attracting Chinese shoppers unable to travel
abroad due to closed borders.
That has meant that while a rebound in consumption spending
has remained sluggish in many parts of the country as the
economy struggles to recover, it has started off strong in
Hainan after China ended its zero-COVID policy in December: duty
free sales on the island rose 20% over this year's seven-day
Spring Festival holiday period in January.
And China further plans to elevate its status: by 2025, it
plans to make the whole island duty free, essentially expanding
the 10% to 40% cheaper prices on goods from beauty, to alcohol
and luxury products from 12 existing duty free malls to the
entire province.
That has made high-end global consumer firms keen to
attend the expo as a way of demonstrating their commitment to
China, industry executives said.
"Last year here was kind of quiet but this year's expo has
been booming," said Amy Imbriaco, general manager of Greater
China for luggage and bag maker Tumi. Some 3,300 brands
participated this year, versus 2,800 last year, organisers said
Comestic giants such as Japan's Shiseido 4911.T promoted
products with exclusive packaging for the Hainan market while
luxury car brands such as Bentley, Porsche and Ferrari showed
off shiny high performance vehicles at the venue.
In the wine and spirits pavilion, makeshift bars were
set up to provide taste tests of whiskey and wine, while Diageo
DGE.L offered soft serve Bailey's-flavoured ice-cream.
"This year in particular we feel like every exhibitor is
presenting new brands and products in order to capture the
opportunity presented by China's consumption recovery," said
Ella Yu, head of corporate communications for Japanese beauty
conglomerate Shiseido 4911.T in China.
($1 = 6.8677 Chinese yuan renminbi)
(Reporting by Casey Hall; Editing by Kim Coghill)
((Casey.Hall@thomsonreuters.com;))