Hainan Free Trade Port builds a consumer paradise and accelerates the layout of international luxury brands

　　(Economic Observation) Hainan Free Trade Port builds a consumer paradise and accelerates the layout of international luxury brands

　　China News Agency, Haikou, November 5 (Reporter Wang Ziqian) The new crown epidemic has caused Chinese consumers to return to overseas consumption, and international luxury goods companies have taken the initiative to enter China to open up the market.

There are many signs that the Hainan Free Trade Port, which is building a shopping paradise, is attracting international luxury companies to accelerate their deployment.

　　Recently, the famous French brand Remy Martin opened China's first offline boutique in Haikou.

"Hainan is of strategic significance and will reshape the retail market." Nicolas Beckers, CEO of Remy Cointreau Group in Greater China, said that the store became a brand due to its optimistic view of the consumption potential led by Hainan Free Trade Port. The first step taken in the offline direct sales model will continue to enrich the consumption channel matrix in the future.

　　Since the epidemic, the Chinese market has become a growth point for the global luxury goods industry, and Hainan has sprung up.

According to a research report released by Bain Consulting, global luxury goods sales in 2020 will drop by 23% compared to 2019, but the Chinese market has achieved an annual growth of about 48%.

The "2021 China Luxury Products Report" shows that Sanya has surpassed all second, third and lower tier cities to become the fifth largest luxury shopping city in mainland China.

　　Last year, Hainan’s outlying islands’ new tax-free shopping policy was implemented. The tax-free limit was increased from 30,000 yuan (RMB, the same below) per person per year to 100,000 yuan. The 8,000 yuan tax-free limit for a single product was cancelled, opening up the space for high-end consumer goods.

　　"China has entered a new stage of development, and the improvement of consumer consumption has become a trend change, and the global demand for medium and high-end consumer goods is rapidly expanding." Wang Wei, director of the Market Economy Research Institute of the Development Research Center of the State Council of China, analyzes that Hainan is in a domestic and international dual cycle. At the intersection, building an international tourism consumption center is more conducive to promoting mid-to-high-end consumption and quality consumption.

　　Luxury brands have found a stage in the rapidly growing outlying island duty-free market.

Official data show that in the first three quarters of this year, Hainan’s outlying islands’ duty-free sales reached 41.7 billion yuan, a year-on-year increase of 118%.

According to the Hainan Provincial Department of Commerce, more than 20 single-store sales of Cartier, Bulgari and Tiffany ranked first in the global travel retail.

　　During the interview, Zhi Dongliang, the head of Savills' South China Commercial Department and senior director, said that before the epidemic, the outflow of luxury goods in China was mainly due to the price difference caused by the exchange rate and tax rate. After the epidemic, Hainan once again offered consumers to buy at the price difference. Opportunities for favorite luxury goods.

He said: "The advantage of the free trade port policy is the'moat' that other regional markets cannot cross. This is why luxury brands focus on Hainan."

　　In view of the optimistic view of this luxury goods market, the first China International Consumer Goods Expo held in Hainan in May this year attracted the world's three major luxury goods groups LVMH, Kering and Richemont to participate in all.

During the exhibition, the "China-Europe Fashion Express Line" from Milan, Italy, directly flies to Haikou, and European luxury goods can be placed at the sales counter of Shanghai South Duty Free Shop in 36 hours.

　　The reporter noticed that Hainan duty-free shops have cooperated with luxury brands in various forms this year, including opening single stores, holding pop-up events and exhibitions.

As one of the most important international watch exhibitions, the "Watch and Miracle" high-end watch exhibition has been held in Sanya for two consecutive years, introducing high-end watches such as Vacheron Constantin, Panerai and Montblanc.

Panerai CEO Jean-Marc Pontroué said in an interview with the media that at present domestic consumption and foreign trade are both the driving force of China's economic growth, and Hainan is the leader.

　　In the context of consumption upgrades, outlying island duty-free companies will increase the introduction of luxury brands as their strategic considerations.

The reporter learned that CDFG has introduced high-end luxury brands in the Phase 1 Lot 2 of Sanya International Duty Free City. The third phase of the Global Boutique Duty Free City under Hainan Holdings will mainly operate heavy luxury brands.

　　Some analysts pointed out that the "marriage" with duty-free shops will have some impact on luxury brand building and profit margins.

Luxury goods companies should formulate specific development strategies for Hainan, and seek a balance between increasing sales and protecting brand image.

　　How will the Hainan luxury goods market develop in the future?

The industry believes that Hainan should create a differentiated luxury shopping experience for tourists.

"Hainan has the conditions to become the next'consumer paradise' after Hong Kong, but the gap is still quite obvious." Zhi Dongliang said that Hainan should focus on making up for the shortcomings in infrastructure, service levels, luxury brands and business abundance.

Chi Fulin, director of the China (Hainan) Reform and Development Research Institute, suggested that Hainan and Hong Kong could jointly build an international consumer goods trading center focusing on mid-to-high-end duty-free commodities.

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