L'Oreal Eyeing on Hainan Travel Retail Market

Travel retail can help brands better communicate with consumers. Hainan has always occupied an important position in L'Oréal's business.

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L'Oréal said three years ago that Hainan's tax-free consumption and free trade port policies have stimulated consumption growth in the Chinese market and promoted the prosperity of China's beauty industry. "Integrating into the construction of the free trade port is undoubtedly an excellent opportunity to closely connect the L'Oréal brand with the open Hainan, and provide more consumers with high-quality products, services and quality experiences through Hainan's international platform." President North Asia Zone & CEO L'Oréal China Fabrice Megarbane once told the media.

In 2023, L'Oréal is keenly aware of the recovery of Hainan's travel retail industry, and observed from the beginning of this year that "everyone started to go out and reconnect with the world around them". The resumption of social activities where people gather together has brought about a rapid increase in offline traffic and created a lot of business opportunities.

"Hainan has played a very important role at the moment when offline travel and the flow of people are rapidly recovering." Fabrice said in an interview with the media including CHAILEEDO.

Travel retail is part of brand communication

Fabrice said the new seaport is a good example of entertainment retail, illustrating how retailers can provide consumers with a good experience and make consumers "returning customers". L'Oréal can provide consumers with more and better experiences and interactions in the retail sector, which will remain the same from now to the future. For consumers, if they have a good travel retail experience and establish a relationship with the brand during the trip, their loyalty to the brand will also increase when they return to their own city.

Tourism does not mean that shopping behavior will definitely occur when going out, but it creates an opportunity and link for brands to interact with consumers.

L'Oréal has been working in China's travel retail market for more than ten years. The CDF project of CDFG in Haitang Bay was the first to let consumers know. L'Oréal, as the first batch of customers to cooperate with, has witnessed the booming development of China's tourism market in the past few years. At present, L'Oréal has many partners in Hainan, and until now has brought 20 international brands to the Hainan market to meet the needs of many tourists here.

Seize the opportunity in Hainan

Recently, the customs sealing operation of Hainan Free Trade Port is already underway. After completion, consumers will be able to enjoy tax-free treatment for imported goods in Hainan. In addition, the customs closure will not affect consumers' shopping and travel in and out of Hainan, and they can enjoy more "dividends" from the free trade port policy, which will promote consumers' willingness to travel.

Fabrice pointed out that Hainan's consumer market can be said to be a process of accelerated upgrading of the consumption and beauty market, so L'Oréal also very much expects that such a policy will bring new opportunities to the beauty market.

It is true that this "market upgrade" is closely related to consumers. "High quality" can be said to be one of the most important concerns of Chinese consumers. Chinese consumers are eager for higher-quality products and services, and their demands are constantly rising, including personalized demands.

Fabrice believes that because of the increasingly complex and escalating needs of Chinese consumers, especially the demand for cosmetics, and the market upgrades complement each other, a unique travel retail market in Hainan has been formed.

Continuous innovation to respond to the needs of consumers

Not only the dividends of the policy, L'Oréal also sees a huge opportunity in the consumer market. The middle class in China is very large, and because of Hainan's geographical advantage, this group of people has a strong willingness to spend in Hainan.

"Such a large number of consumers, coupled with their very strong and very upgraded consumer demand, have promoted the continuous innovation of the market." Fabrice said. "Beauty makeup has given consumers exact confidence and strength." Chinese consumers not only need better efficacy, but also more personalized products to express themselves.

Based on this, the trend of the beauty market will tend to be diversified and innovative. "This year's makeup market is very prominent, and everyone is pursuing a very diverse style of styling and makeup." This also means that L'Oréal must constantly innovate new products to meet the needs of consumers and the market.

"We will continue to innovate along with the Hainan market. Because this market can serve so many Chinese consumers, it will eventually help us better understand and gain insight into Chinese consumers.”