China’s luxury shoppers are free to travel, but many buy locally

SANYA, China, Jan 26 (Reuters) – China’s lifting of travel restrictions this month is expected to revive demand in the global luxury retail market, but many consumers are finding more reason to do their high-end shopping locally on the duty-free island. Hainan.

On Wednesday, thousands of travelers in Hainan’s Sanya city thronged CDF Mall, a shopping center dedicated to duty-free stores, where they stocked up on cosmetics and handbags during the Lunar New Year holiday.

“England is so far away, it’s hard to buy a ticket,” said student Yu Shunxiao, who said she was shopping at Harrods in London. “In Sanya, you can come and go whenever you want.”

In early January, following a nationwide easing of Covid-19 containment policies, Beijing ended a long-standing requirement that all incoming travelers be quarantined in a hotel immediately upon arrival.

As a result, Chinese people sought to go abroad. On Trip.com, a popular ticket booking site, international flight ticket purchases increased 200% the day after the policy change was announced.

Luxury brands and retailers are hoping a tourism boom out of China will bring strong sales in 2023, as the post-pandemic frenzy in the US and Europe eases. read more

Despite this, some experts argue that part of China’s luxury spending remains within the country’s borders, even though consumers can now travel freely.

Jonathan Yan at consultancy Roland Berger in Shanghai told Reuters that since the three-year border closure, Chinese shoppers have become more accustomed to buying foreign luxury goods in China.

“A portion (of luxury shoppers) will return to their original pre-Covid overseas consumption,” Yan said. “But I think the local (luxury market) will be important for most brands.”

Reporting by Alessandro Divigiano in Sanya, Josh Horwitz in Shanghai; Editing by Raju Gopalakrishnan

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