{"id":325,"date":"2023-04-17T16:13:37","date_gmt":"2023-04-17T08:13:37","guid":{"rendered":"https:\/\/www.ftpol.com\/en\/?p=325"},"modified":"2023-04-17T16:13:37","modified_gmt":"2023-04-17T08:13:37","slug":"foreign-brands-flock-to-chinas-hawaii-as-consumption-rebounds","status":"publish","type":"post","link":"https:\/\/www.ftpol.com\/en\/foreign-brands-flock-to-chinas-hawaii-as-consumption-rebounds.html","title":{"rendered":"Foreign brands flock to China\u2019s Hawaii as consumption rebounds"},"content":{"rendered":"
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Foreign consumer brands are flocking to China\u2019s tropical island of\u00a0Hainan<\/span><\/span>, riding on hopes for a post-pandemic economic recovery to drive a revival in tourism and local demand.<\/p>\n<\/div>\n

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American-French beauty company Coty, which holds licensing rights in cosmetics and fragrances to brands such as Burberry and Gucci, plans to add nine new sales points \u2013 including seven stand-alone shops \u2013 to its 29 existing sales points in Hainan in the next financial year, which begins in July, said Guilhem Souche, senior vice-president of global travel retail, in a recent interview with the South China Morning Post.<\/p>\n<\/div>\n

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New York-listed Est\u00e9e Lauder, meanwhile, established in late March its first office in Hainan, dubbed China\u2019s Hawaii, late last month, citing the region\u2019s \u201cstrategic importance\u201d for the group\u2019s travel retail business. It came after the beauty giant last October started selling in 13 shops in Haikou, the provincial capital, in collaboration with China Duty Free.<\/p>\n

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The increasing footprints of international consumer brands underscore their growing investments in mainland China and its southernmost province of Hainan, which is set to become\u00a0the world\u2019s largest free-trade port by 2025<\/span><\/span>. The 35,000 sq km island, famed for its tropical scenery and beaches, is 27 times the combined size of the country\u2019s 11 other free-trade zones, or 32 times the area of Hong Kong.<\/p>\n<\/div>\n

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Buoyed by optimism about China\u2019s economy after the country abandoned its stringent pandemic controls, foreign companies have rushed to enhance their presence in Hainan and the broader mainland market. The country is expected to announce this week <\/span>a huge rebound in economic activity<\/span><\/span>\u00a0in the first quarter.<\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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As Chinese consumers adopt\u00a0a more cautious spending attitude<\/span><\/span> in the aftermath of three years of strict Covid controls, however, foreign firms are propelled to further innovate to meet the needs of more demanding customers, companies said.<\/p>\n<\/div>\n

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New York-listed Coty said it is introducing a new brand to China in the second half of 2023, and eyeing an expansion into the local skincare segment in the next few years.<\/p>\n<\/div>\n

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\u201c[Our] priority\u2019s always been China. If you look at skincare, China is really already the No 1 market in the world, dominating and still growing even during the three years of Covid,\u201d said Souche. \u201cHainan is playing a key role for travel retail. This is why, for us, Hainan is so important.\u201d<\/p>\n

His comments came as more than 3,300 consumer brands showcased their goods at the China International Consumer Products Expo held last week in Haikou, which was one of the largest in-person exhibitions in the country since Beijing lifted its Covid-19 restrictions in December.<\/p>\n

The event saw a strong return of interest in Hainan\u2019s high-end consumption market. Brands that exhibited at the six-day expo surged by 19 per cent from a year earlier, while the number of participants exceeded 320,000, according to official data.<\/p>\n

Many were encouraged by Beijing\u2019s call to boost domestic consumption, a key pillar for economic growth amid a tepid trade outlook. A number of companies said they are prepared to raise investment in Hainan.<\/p>\n

Akiba Takamitsu, deputy director-general of Japan External Trade Organisation, said all of its 38 member companies are considering coming to Hainan, while one has already opened shops in Sanya city, known for its upscale beachside hotels.<\/p>\n

Many of the member companies import premium rice, wine, and fabrics from Japan, and they are attracted by Hainan\u2019s preferential business environment and policies.<\/p>\n

Although sales made in the first days of the expo were still lower than pre-pandemic levels, Takamitsu said he expects things to get better. \u201cI am confident that the market will continue to recover in China. It won\u2019t be immediate, but 2023 will be a great year,\u201d he said.<\/p>\n

Xie Yan, a Czech crystal importer, is also tempted to set up shops in Hainan, but said he is waiting to see if his company can benefit from the island\u2019s free-trade policies.<\/p>\n

\u201cThe biggest issue right now is that all the duty-free brands are managed by six state-owned companies. It\u2019s unknown whether the duty-free policy would be applied to small and privately-owned companies like us,\u201d he said.<\/p>\n

However, some companies believe that the local market in Hainan is already saturated after a rush by brands onto the island during the pandemic, especially in the competitive skincare and cosmetics segments.<\/p>\n

Swedish skincare device maker Foreo said it will put more focus instead on expanding in other parts of China, with plans to launch a new skincare product line in both China and the rest of the world in the second half of this year.<\/p>\n

The company, which currently has 12 shops in four cities in Hainan, still aims to add one to two shops on the island annually, but it will focus on enhancing local services and optimising its interaction with consumers, said Allen Fang, travel retail manager at the company.<\/p>\n

\u201cCompanies in this market are looking for differentiation, so pricing will not be as aggressive as the previous two years, when brands were engaging in price wars,\u201d he said.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Foreign consumer brands a<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/www.ftpol.com\/en\/wp-json\/wp\/v2\/posts\/325"}],"collection":[{"href":"https:\/\/www.ftpol.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ftpol.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ftpol.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ftpol.com\/en\/wp-json\/wp\/v2\/comments?post=325"}],"version-history":[{"count":1,"href":"https:\/\/www.ftpol.com\/en\/wp-json\/wp\/v2\/posts\/325\/revisions"}],"predecessor-version":[{"id":326,"href":"https:\/\/www.ftpol.com\/en\/wp-json\/wp\/v2\/posts\/325\/revisions\/326"}],"wp:attachment":[{"href":"https:\/\/www.ftpol.com\/en\/wp-json\/wp\/v2\/media?parent=325"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ftpol.com\/en\/wp-json\/wp\/v2\/categories?post=325"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ftpol.com\/en\/wp-json\/wp\/v2\/tags?post=325"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}