Bullish on China’s Duty-Free Future, LVMH, Kering Show at Hainan Expo

SHANGHAI — The tropical city Haikou in Hainan hosted the second China International Consumer Products Expo this Tuesday.

Postponed from April to July due to COVID-19-related restrictions, the second edition of the Expo featured more than 1,322 brands from 58 countries and regions. The Expo is the largest consumer products exhibition in the Asia Pacific region.

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LVMH Moët Hennessy Louis Vuitton, Kering, Richemont, Tapestry and Burberry were among the luxury and fashion exhibitors at this year’s fair, showing their commitment to the nascent event and Hainan’s future as a free-trade port shopping paradise.

Andrew Wu, LVMH group president of Greater China attended the Expo to sign a partnership agreement with The Haikou Integrated Free Trade Zone. LVMH will set up a bonded warehouse in the zone dedicated to the group’s perfume and cosmetics travel retail business.

“We have established our presence here through pop-up shops and other retail formats. In the future, consumers all over the world will come here to shop, we think Hainan is very important, and we are highly optimistic about the market,” said Wu.

LVMH Moët Hennessy Louis Vuitton brought DFS Group, Hublot and Moët Hennessy to the show.

Despite media speculation that Louis Vuitton might set up shop in the zone, the brand denied claims that it is considering any options within the licensed duty-free market.

Kering highlighted jewelry brands Boucheron and Qeelin at the Expo, where the Hainan Gibbon Bo Bo piece made its debut. The unique item will be auctioned off by Christie’s, with proceeds donated to Hainan Provincial Forestry Bureau to support the Hainan tropical rain forest and Hainan gibbon conservation efforts.

Burberry brought a range of products to the fair, including the signature Lola bag and TB Summer Monogram collection. It’s one of the few luxury brands with products that can be directly purchased at the booth.

An exhibitor works at Burberry booth before the 2nd China International Consumer Products Expo at the Hainan International Convention and Exhibition Center. – Credit: VCG via Getty Images

VCG via Getty Images

As an extension of the Lola bag pop-up series, Burberry created an immersive camel-colored space with metallic frames, large golden chains from the ceiling, and merchandising shelves that echoed its iconic Check. The brand also brought along Chinese influencers to celebrate the event.

In April, Tapestry announced Hainan as the new headquarters for China travel retail. The American fashion group showcased Coach, Kate Spade and Stuart Weitzman products at the Expo.

With COVID-19-related travel restrictions, mainland China shoppers had to trade shopping in Paris, London or Milan for shopping locally. According to Bain & Company, the Hainan-trade port has become an emerging market for luxury goods, accounting for 13 percent of sales nationwide in 2021.

Bain & Company believes China’s luxury market will pick up the pace of recovery and return to 2021 levels by the end of this year or early 2023.

“With retail projects like Haitang Bay on the rise, more non-duty-free businesses launching here, Hainan free-trade port’s strategic position will become more prominent,” said Xing Weiwei, partner at Bain & Company.

Set up by Hainan in 2021, the free-port zone aims to become the world’s largest duty-free consumer market by 2025, with sales exceeding 160 billion renminbi, or $23.7 billion. Hainan Expo serves to showcase Hainan’s ambition and promote consumption.

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