Hainan has become a new entry point for international beauty brands to test the Chinese market.
Photo from CFP
By ZHANG Xinyu
From May 7th to 10th, the first China International Consumer Products Expo was held in Haikou in the tropical island of Hainan Province. International beauty groups including Kao, L'Oréal and Shiseido brought new brands.
Last year, sales in Hainan’s duty-free stores hit 27.5 billion yuan (US$4.3 billion), more than double the 2019 total. In the second half, fragrance products accounted for more than half of total sales.
Kao Group, previously aimed at the middle of the market, showed off its high-end lines, SENSAI and est. At present, there are about 3,800 SENSAI stores around the world, but none in China. Junichi Tanaka, head of cosmetics for Kao, said the Hainan duty-free store was the first target, and then the company planned to expand through e-commerce and stores in key cities.
ZHANG Tao, managing director of L'Oréal’s Asia Pacific travel retail high-end cosmetics department, said the company plans to introduce two new brands to China in 2021, Valentino and Urban Decay. Valentino Beauty will enter the Chinese market through Hainan's tourism retail channel in the second half of 2021. Urban Decay, a high-end professional makeup brand, opened up on Tmall in 2020. Zhang Tao said that in 2022, the company would offer new brands, exclusive to Hainan.
Shiseido Group’s THE GINZA is sold to be sold outside Japan for the first time. Kentaro Fujiwara, president of Shiseido China, said the group will focus on Hainan to expand the influence of its high-end brands on Chinese travelers.
While Kao, L'Oréal and Shiseido have been in China for years, other overseas beauty groups are using Hainan’s duty-free market as their first port of call. Almost all are all brands at the high-end of the market.
High-end beauty brands performed significantly better than popular brands in China during the pandemic. Shiseido and Kao have therefore accelerated the introduction of their premium brands into the Chinese market. In the first quarter of 2021, Shiseido's sales of high-end cosmetics brands achieved year-on-year growth of more than 70 percent.
L'Oréal North Asia President and China CEO Fei Bori said Hainan’s tax and freeport policies made the island very attractive to the beauty industry.