Ralph Lauren, Coach, Estee Lauder look to China’s Hainan Island as US luxury brands go to where high-end shopping’s happening

Hainan’s shopping surge has provided a valuable lifeline to luxury companies that have been deprived of tourism-related sales

Last July, Chinese authorities tripled the annual allowance for duty-free purchases in Hainan to US$15,500 per person

2-MIN READ2-MIN

Customers visit a duty-free shop in Haikou, south China’s Hainan Province, on January 31. Photo: Xinhua

Published: 3:15pm, 14 Feb 2021Updated: 3:15pm, 14 Feb 2021

Impatient for shoppers to start buying high-end goods again, US luxury retailers are turning their gaze to the one place in the world where that’s happening: an island in the South China Sea.

Hainan Island, China’s smallest province, is one of the few tourist destinations on the planet that’s back in full swing as virus-related restrictions squeeze international travel. The revival has caught the attention of executives like Patrice Louvet, chief executive officer of Ralph Lauren.

“Hainan is a strategic priority for us,” Louvet said. “Every business is looking at it.” Ralph Lauren has three stores there and plans to open another in the second half of 2021.

Customers visit a duty-free shop in Haikou on January 31. Photo: Xinhua

Last July, Chinese authorities tripled the annual allowance for duty-free purchases in Hainan to 100,000 yuan (US$15,500) per person as the province attracted masses of domestic tourists unable to vacation elsewhere. In January, Hainan’s daily duty-free sales averaged 180 million yuan, up threefold from the year prior, according to the local government.

This surge has provided a valuable lifeline to luxury companies that have been deprived of tourism-related sales that normally drive a hefty chunk of sales.

“Hainan Island is on fire,” Capri CEO John Idol said on a conference call with analysts. “That’s probably the only tourist location that we can talk about globally that is seeing a strong performance.”