LVMH-owned luxury brands Louis Vuitton and Dior are expected to settle in at Sanya Haitang Bay, with the two labels’ job ads for store manager positions being the latest step. On 10 April, the Dior boutique recruitment platform announced the intention to hire, which was followed by a similar announcement from Louis Vuitton on 12 April when the brand also unveiled its plan to land in the coastal city of Hainan province in September 2023.
Given the existing presence of other luxury names including Fendi, Loewe, and Bulgari, the entry of Louis Vuitton and Dior is expected to intensify the race amongst global luxury leaders in winning over the lucrative footfalls in one of China’s most sought-after tourism hotspots.
It is reported that the passenger throughput of Haikou Meilan Airport reached 6.48 million during the first three months of this year, a year-on-year increase of 45.5%, and recovered to 90% in the same period in 2019. The passenger throughput of another major airport, Sanya Phoenix Airport reached 6.1 million, a year-on-year increase of 23%, and recovered to 101%, also from the same period in 2019, indicating that the region is drawing in great interest from domestic travellers.
The influx of local tourists has also pushed the recovery of local tourism-related consumption. According to data from the Ministry of Commerce, sales of offshore duty-free shops in Hainan reached 16.9 billion RMB (2.46 billion USD) in Q1 2023, up 18% year-on-year, driving the prosperity of the duty-free market. According to official forecasts from Hainan Province, the sales of duty-free shops on Hainan Island are expected to surpass 80 billion RMB (11.64 billion USD) in 2023.
China Duty Free Group (CDFG), as the leading duty-free company in the industry, has achieved nearly 70% of its total revenue in the Hainan market. Sanya Haitang Bay Phase II will begin operating in 2023, which is expected to propel an increase of the company’s market share as well as its brand tenants.
While these local resources have laid the foundation for luxury businesses, fierce competition amongst market players is expected. This means brands who can leverage the region’s geographic characteristics to enhance their own appeal will have a chance at grabbing a slice from the resurging industry in the desired marketplace.