Retail in Asia


The Beauty Edit: Chapter III – Post-COVID Travel Retail beauty trends revealed in TFWA Beauty

WITH Travel Retail Client Partner Xue Guo outlined the most important digital trends influencing the perfumes & cosmetics category during the TFWA Beauty in Travel Retail Webinar in Hainan. As the COVID-19 pandemic changed the world of travel retail, The Moodie Davitt Report memorably described Hainan as the ‘lighthouse’ of the sector amid the darkness cast elsewhere due to international travel restrictions and closed borders.

Xue Guo, a Client Partner at Parisian marketing firm WITH Consultancy, who is in charge of its travel retail division, picked up on the phrase during her presentation at the recent TFWA Beauty in Travel Retail Webinar, noting that Hainan had become one of the world’s biggest travel retail markets. She commented, “Market size predictions reveal that China is expected to make up 30% of the global travel retail market, reaching US$27.8 billion in sales by the end of 2022. Hainan alone is predicted to represent 18% of global travel retail sales by the end of the year, reaching US$15.5 billion.”

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According to Guo, Hainan is an ideal location for brands seeking to make a big impact in travel retail. Three key reasons driving that allure, she identified to be market size, shopper behaviour and dynamic local retailers.

“In terms of shopper behaviour, over 60% of Chinese shoppers would return to Hainan with 40% planning to increase their spend during their next visit. Today, the average spend per consumer in Hainan is US$1,200 per trip,” Guo added.

Source: Pixabay

“China Duty Free Group was ranked the world’s 4th biggest retailer in 2019 but climbed to the top spot during COVID times,” she went on further to say, drawing on The Moodie Davitt Report Top 25 Travel Retailers report. “This was driven by the boom of Hainan’s off shore duty free business as Chinese travellers remain China-bound. Other local retailers continue to set the bar high in Hainan, with new developments and projects continuously changing the retail landscape in the region.”

Guo discussed the three major trends influencing the perfumes & cosmetics category in Hainan. “Many brands are creating beautiful and attractive offline counters, supported by equally engaging online WeChat Mini Programs, live-streaming and virtual environments.”

“Beauty brands are launching cross-category collaborations with Hainan hotels and restaurants to bring their products and animations to life,” Guo added. “These companies see Hainan as a ‘test and learn’ playground for new initiatives. A place where they can try out exciting new campaigns and projects before rolling them out to the rest of China and the wider Asia Pacific region.”

To illustrate how these trends are being implemented in Hainan, Guo shone the spotlight on three of the most memorable beauty and fragrance activations in Hainan over the last year. She highlighted Jo Malone London’s JoBots activation; Lancôme and China Duty Free Group’s Chinese New Year partnership; and Christian Louboutin’s Golden Week campaign as key examples of how digital strategies are flourishing in Hainan.

The Jo Malone London and China Duty Free Group JoBots collaboration ran at the Haikou Mova Mall and featured travel retail-exclusive gifts with purchase, gift boxes, stickers and other shopping accessories. The robots were playful and engaging, while the pop-up featured plenty of retailtainment elements. These included a JoBots vending machine and interactive AI-powered game. The activation was supported by KOL and social media promotion, extending its reach in the digital realm.

Source: Andrey Khrobostov

Lancôme’s Chinese New Year activation was highlighted as an excellent example of cross-category collaboration. The project was launched in partnership with China Duty Free Group and the Sofitel Haikou and Hainan hotels. The parties created an enticing beauty experience for guests staying at the Sofitel hotels in the island province. Lancôme’s ‘Create happiness everywhere you go’ campaign was brought to life through a series of premium services, from hi-tech skin analysis and in-room samples to a gastronomy experience. Christian Louboutin, Hainan Tourism Duty Free Shopping Complex (HTDF) and Lagardère Travel Retail’s Golden Week pop-up was highlighted because of its innovative partnership with Fliggy and Ctrip. Puig launched programmatic digital advertising on these platforms, leading Hainan travellers to the event page and pop-up space at HTDF.

The activation, which launched during the busy Golden Week holiday period, highlighted the brand’s lipstick and fragrance lines. The promotion’s omnichannel approach engaged with travellers at all points of their journey through various digital touchpoints on key Chinese social platforms and travel websites. It was also supported by in-store traffic-stopping activities, which deployed Christian Louboutin brand ambassadors to invite shoppers to visit the brand’s boutique on level three. Guo also touched on the subject of Hainan’s growing Bugou market and how it provides an opportunity for brands and retailers to boost sales. The ‘Bugou channel’ refers to the 180-day period in which Chinese travellers can use up their undepleted duty free allowances.

“Brands and retailers can increase sales and brand awareness by engaging with shoppers in the Bugou channel. To maximise opportunities in this space, companies need to invest in Chinese social media like WeChat, Weibo and Red. They can also invest in travel specific platforms such as Fliggy and Ctrip, which are more niche to the travel market. Finally, they must increase the reach of their general accounts and make duty free information more accessible for shoppers,” Guo asserted.

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She believes that the Bugou business has nowhere to go but up. “The Bugou channel will continue to grow with the development of Hainan. The prices in this channel are very competitive when compared to the prices in the Mainland market. Travellers don’t even need to pick up the product in the airport. They can simply click one button and have their purchases delivered directly to their homes. Many brands are joining this channel to boost sales and promote new products, and I think it is here to stay.”

Collectively, the beauty category is the biggest and most competitive category in travel retail. Nowhere more so than in Hainan where beauty brands are competing to outshine each other with bigger beauty blockbusters each year. As Hainan’s share of the global travel retail market continues to grow, beauty brands and retailers must remain agile and embrace innovation both in the digital and real worlds to adapt to the region’s ever-changing retail landscape.

(Source: The Moodie Davitt Report )