Personalisation and premiumisation: Beauty brands pull out the stops at opening of China's mammoth duty-free complex

The vast 280,000 sq m site, called Haikou International Duty-Free City, was officially opened on Friday by China Duty Free Group (CDFG) featuring more than 800 international and domestic brands. 

In the beauty realm, brands have pulled out all the stops to provide an interactive experience featuring virtual make-up tech, a fragrance classroom, tutorials from celebrities, expert lectures and exclusive customisation.

Chanel, Dior, Estee Lauder, La Mer, Cle de Peau Beaute are among the major players to open stores, alongside a further 10 exclusive beauty brands for Hainan, such as Sulwhasoo, Laneige and Hera.

Notable firsts include the debut spa experience in global travel retail for brands such as Guerlain and Givenchy.

Meanwhile Shiseido and IPSA are among the brands offering exclusive gift packaging, while Hermes is offering personalised customisation services for its make-up products, and SK-II’s is providing its artificial intelligence non-contact skin test.

CDFG has also introduced a ‘scan and purchase’ scheme for perfume and cosmetics, which is says will significantly cut queueing and waiting times.

Cash boost

In 2021 almost half of tourists to the island province visited duty-free shops and one in six made a purchase.

Off shore duty-free sales in Hainan account for about half of the province's tourism revenue.

"This is another signature event in the construction of Hainan free trade port,"​ said Feng Fei, governor of Hainan province."Offshore duty-free shopping has become one of the great namecards of Hainan's tourism sector."​

The complex has six plots in total dedicated to duty-free businesses, high-end offices and hotels as well as ‘talent communities’.

Olivier Salmon, vice-president of Parfums at Christian Dior Travel Retail China & Japan, noted: "China has become a very important global travel destination for the retail sector. Many companies consider China to be among the most important markets or even the No 1 market. I think Chinese customers are very open-minded in discovering new products, quality luxury and fashion trends."​

The annual tax-free shopping quota in Hainan is 100,000 yuan ($13,784) per person. The local authorities are even handing out vouchers worth a total of US$7m for visitors to use towards duty-free purchases.

Hainan has experienced a domestic tourism boom in recent years, something that brands will be banking on continuing giving China’s ongoing COVID-19 international tourism restrictions.

Chen Guoqiang, General Manager at China Tourism Group Duty Free Corporation Limited, said: "The offshore duty-free shopping in Hainan and the fact that China has a very strong spending power are the reasons why suppliers are bullish on China. I think this is closely related to our country's reform and opening-up policy, which now includes sharing its development dividends."​