What: Hainan is growing fast and taking the share of the lion in terms of international luxury market shares

Why it is important: the Chinese authorities keep this growth under a very close watch, this Eldorado might not be risk-free for international brands.

To boost domestic consumption and increase the recuperation rate, China turned the island of Hainan into a duty-free shopping hub. Combined with the international borders closure, this results into Hainan being the epicentre of international luxury spending, with total sales amount expected to grow sevenfold by 2030. For now, 50% of sales are in beauty and cosmetic products, however hard luxury is growing strongly as well, from a third of sales now.

This is obviously fuelling international luxury players such as LVMH which announced that the Chinese market helped it not only overcome the 2020 difficulties, but post a growth in comparison with pre-pandemic levels of 2019.

However, the structure of the market, and the permanent control enforced by the Chinese authorities fuel worries within brands that they might loose control of their distribution, and encourage, unwillingly, the expansion of Daigous (parallel resellers).

Hainan ‘on fire’ as luxury’s centre of gravity tilts to China