By 2025, Chinese luxury shoppers should spend 390 billion USD on luxury goods in China according to Bain & Company. The Covid-19 pandemic accelerated this prediction due to travel restrictions. Especially for beauty and cosmetics brands, the Chinese shopper was above all a Chinese traveler who could purchase in Europe, in China, or even more in airports. Hainan was the source of wealth for Travel Retail, and above in Asia. Today, the Chinese luxury shopper would preferably purchase in China. And Hainan is becoming the reference to luxury shopping in China.
The Paradise Island for Chinese and Travel Retail
History of Hainan
Hainan literally means “South of the Sea” but is often named the “Hawaii of China“. With its palm trees, warm sea, and fresh coconuts, Hainan is definitely a paradise island for both locals and tourists. Chinese love to travel to Hainan to have a special time with their family and friends. It was a key opportunity for locals to change the face of the island and turn this Chinese island into a wonderland of luxury and idyllic scenery. On average, 76 million international and domestic tourists are coming to Hainan every year. By comparison, there are only 9 million people living on the island.
Why Hainan is so much attractive for international tourists? Because you have all the benefits of a paradise island… at a low price. This is the preferred destination for yachting and golf where several competitions are organized. The island transformed into a key destination for luxury shoppers. Especially, when you know that you do not need any visa to go to Hainan. Today, 59 countries are concerned by this policy. Obviously, you need a visa to enter China and the procedures are time-consuming. But Hainan is an exception and you can freely enter. The Chinese government even wants to go further with a free trade port with no tariffs, low taxes, and local autonomy.
A Family Destination Moving Towards A Luxury Destination
For a long time, Hainan was not a premium location. When you are in Sanya, the landscape is a surprising mix of Miami, Dubai, and Hawaii. You can even discover the biggest buddha on the water. Compared to Bali, Hainan was more of a low-cost luxury destination for tourists. For luxury shoppers, it was more symbolic to travel to Europe to live a luxury lifestyle rather than doing in Hainan. Even Generation Z tends to consider Hainan as a family destination instead of a luxury destination. But the Covid-19 crisis transformed this way of thinking.
China anticipated this transformation of Hainan island in 2009 by promoting it as the next destination for tourism and luxury. For instance, duty-free stores and huge malls like the Dadonghai International Shopping Center often compared to a pineapple. The island is a great hub of extraordinary shopping experiences to seduce Chinese luxury shoppers. By 2025, Chinese luxury shoppers should make 50% of their luxury purchase in China. Beauty and cosmetics brands definitely need to offer a new shopping journey including “New Retail” and phygital experiences. Brands looking to sell cosmetics in China must consider Hainan as a priority channel, alongside e-commerce and social platforms like Xiaohongshu.
The New Hainan for Luxury Shoppers
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