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Luxury travel retail ups ante in China’s airports as tourism booms

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6 months ago

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Luxury travel retail ups ante in China’s airports as tourism booms

What happened

Shiseido Travel Retail just unveiled an omnichannel experience, dubbed the “Nars Voyage,” designed to captivate and engage Chinese travelers through digital journeys on WeChat and via virtual fittings, and an IRL retail experience at Hainan’s Sanya Airport. It’s not the only brand upping the ante at travel retail touch points. On June 10, DFS Group and Maison Margiela unveiled a pioneering fashion boutique at Shanghai Hongqiao International Airport’s Terminal 2. The new boutique aims to cater to growing demand for high-end fashion among Chinese travelers.

The Jing Take

Global Blue’s May 2024 tax-free shopping data showed that the spending recovery had accelerated in mainland China, Europe and APAC compared to pre-pandemic data. Mainland Chinese shoppers’ spending reached 132% of May 2019’s levels, while globally, physical store sales in May 2024 recovered by 172% compared to May 2019.

The rapid evolution of China’s domestic duty-free shopping ecosystem since the pandemic has seen government policies boost spending limits and the diversification of product offerings.

Initiatives like increasing the annual duty-free allowance in Hainan – similar plans are afoot for Hong Kong – and expanding the range of tax-free items, have fueled this growth​. Recent moves by DFS and LVMH to invest in an expansive “7 star” shopping complex called DFS Yalong Bay in Sanya exemplify this trend.

Airports and international travel duty-free retail are now playing catch up. Although Chinese outbound tourism is finally rebounding, spending behavior has shifted.

Post-pandemic travelers prioritize experiences over shopping, and retailers and brands like Nars and Margiela must adapt by offering unique, value-added services​.

Margiela’s debut in an airport setting last month comprises a boutique that showcases the brand’s distinctive fashion lines, featuring ready-to-wear collections, accessories, handbags, and shoes, all set within a uniquely textured backdrop designed to enhance the airport shopping experience​.

It’s a significant milestone for Maison Margiela’s expansion, and showcases DFS’ elevation of its luxury offerings in duty-free airport zones and travel environments.

The “Nars Voyage” journey begins online with the Nars Voyage WeChat Mini Program, where users can indulge in virtual try-ons, gamification, and derived personalized product recommendations. This digital experience culminates into a physical one at the CDF Sanya International Duty Free Complex, where an immersive retail showcase awaits.

The multi-sensory setup features live makeup demonstrations, creating an interactive and dynamic environment that bridges the digital and physical realms of beauty retail.

As retail experiences become more competitive in China’s key airports, airport travel zones aren’t the only ones leveling up. On 30 May, Shanghai International Port Group and China Duty Free Group inked a partnership to develop the 180,000 square meter Shanghai International Cruise Tourism Resort, integrating high-end outlets, leisure, entertainment, culture, and family-friendly facilities. Just like how China’s shopping malls developed to become complexes embodying entertainment, shopping and culture, a similar new era of retail-tainment for duty-free and travel retail is unfolding.

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