On June 26, Sephora’s first store in Hainan officially opened for business. This fresh new branch, aptly located in Hainan’s latest luxury shopping mall Mixc City, aims to cater to local consumers in Haikou as well as incoming tourists. Taking into account the intense sun exposure in the region as well as sea salt that causes a series of scalp and hair care issues, the branch features a large selection of products including sunscreen, hair care, and home fragrance.
Cross-border e-commerce is yet another category the brand plans to focus on. On June 6, Sephora created the “In China for China” business incubator program which aims to accelerate C-beauty’s global expansion by supporting five local brands to reach high-end beauty status with sales of over 100 million RMB within 3 to 5 years.
The recent move to Mixc City’s clearly reflects the beauty brand’s plan to prop up domestic brands while continuing to expand globally. In fact, in addition to the main Haikou Mixc City location, Sephora teamed up with high-end domestic brand WEI to open its first “store-within-a-store” in China. The homegrown brand is known for its herbal skincare and modern interpretations of Traditional Chinese Medicine.
Within the past two years, Hainan has become a new luxury hotspot in China due to its offshore duty-free policy, which raised its tax-free shopping quote from 30,000 RMB ($4,440) to 100,000 RMB ($14,802). This significant change in policy has subsequently attracted a massive wave of luxury companies as well as commercial projects such as Mixc City.
In 2021, the number of duty-free shoppers visiting the island increased by 73% year on year. In addition, sales increased by about 85% to 60 billion RMB ($10 billion), helped by an influx of 81 million tourists. According to Bain’s China Luxury 2021 report, luxury beauty comprises more than 50% of Hainan’s duty-free sales.
With beauty retail leader Sephora’s latest entry into China’s paradise island, along with its clever blueprint to cater to local consumers and boost homegrown brands, there is no doubt that the beauty brand will thrive in the southern island province.