Estée Lauder’s China travel retail headquarters lands in Hainan Free Trade Port

By joining forces with regional governments and financial institutions, global American beauty brand Estée Lauder successfully launched its regional travel retailing division headquarters in Hainan Free Trade Port on 15 December 2022.

This approach signalled a vote of confidence from international conglomerates towards China’s travel retail market, recognising the profitability of the Hainan duty-free industry. According to Estée Lauder’s current President, Javier Simon, “Hainan has transformed into a globally influential free trade zone with its upgraded infrastructures and supportive regulatory policies.” The optimistic outlook of the island province can be observed in its recent blowout growth, with sales exceeding 100 million RMB ($14 million) for 7 consecutive days from 13 December.

Over the past year, the American beauty giant has actively participated in the events happening in Hainan. Aside from setting up its travel retail headquarters on the island, Estée Lauder made its debut in the second China International Consumer Products Expo along with 13 iconic beauty labels under its name, including Tom Ford, La Mer, MAC, Jo Malone and Clinique, to name a few.

Estée Lauder founded its Travel Retail Division in 1992, covering a wealth of duty-free environments including airports, airlines, cruises, downtown locations and border shops. The flagship stores in Hainan duty-free malls largely contributed to the beauty brand’s sales growth in 2020, despite the global economy suffering a terrible downfall due to COVID.

China as a whole has incredible purchasing power in the cosmetics products marketspace, whilst Hainan is one of the most popular travel destinations amongst local citizens. The above two reasons combined have accelerated the total sales of Hainan duty-free stores to 50.49 billion RMB ($7.44 billion), contributing to a staggering 83% year-on-year increase in 2021.

Based on a report published by Goldman Sachs, Chinese consumers are expected to contribute to a whopping 56% of the world’s travel retail consumption with their strong spending power by 2025. Whilst the state-backed duty-free market measures combined with China’s relaxed restriction rules, altogether have inevitably made Hainan Free Trade Port a lucrative market for international beauty players to set foot in.

Apart from the Hainan government, other regional authorities have also issued relevant policies in support of the country’s travel retail industry. For example,  Shanghai launched a regulation to integrate duty-free product sales into its financial development plan for the upcoming 5 years, allowing the city’s high-end shopping malls, airports, hotels and tourist sites to offer this type of service.

With factors such as China’s economic recovery being on track, gradually normalised consumer behaviours, regional authorities’ encouraging attitudes, as well as beauty players’ lively engagements, are together helping to build a prosperous landscape, quickly rebounding Hainan and China’s travel retail industry.


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