The First China International Consumer Products Expo (the "Hainan Expo") was held at the Hainan International Convention and Exhibition Center during May 7-10. More than 1,500 domestic and foreign exhibitors from over 70 countries and regions gathered to attend this national exhibition. Among them, beauty groups and brands such as L'Oreal, Shiseido, Kao, Johnson & Johnson, Bloomage Biotechand Fosun appeared at this expo, looking for opportunities in Hainan.
How big is the Chinese consumer market? How attractive are opportunities in China?To answer these questions, let's first look at the following 5 sets of data:1. The total retail sales of cosmetics in 2020 were RMB 340 billion, with a year over year increase of 9.5%.2. The total import and export value of trade in goods in 2020 was RMB 32.16 trillion, of which the total import value was RMB 14.23 trillion, making it the only major economy with positive growth of trade in goods in the world.3. Even in the context of the epidemic China's online retail sales of physical goods in 2020 grew about 15% year over year, making it the world's largest online retail market for eight consecutive years.4. Consumption has been the premier driving force of economic growth for seven consecutive years, and China has the world's greatest market potential.5. Hainan implemented a new policy for duty-free shopping for tourists departing from Hainan Island. In 2020 the sales of duty-free stores exceeded RMB 32.7 billion.On May 6 President Xi Jinping sent a congratulatory message to the First China International Consumer Products Expo (Hainan Expo), noting that hosting the China International Consumer Products Expo (Hainan Expo) would help other countries share in opportunities provided by the Chinese market, boosting global economic recovery and growth and enabling China to offer the world more quality consumer products.He also emphasized that China is willing to leverage the advantages of the Hainan Free Trade Port in comprehensively deepening reforms and testing the strongest open policies to deepen bilateral, multilateral and regional cooperation.China is opening its arms to provide other countries with more market, investment and growth opportunities.What can Chinese and foreign beauty groups do to seize such a policy opportunity for continuous growth?They found the answer at the First China International Consumer Products Expo (Hainan Expo) during May 7-10.
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presented the power of technology, innovation and sustainabilityIn No. 5 Hall of the Hainan Expo L'Oréal Group debuted its 16 major beauty brands.At the Expo the L'Oreal booth at all design stages, ranging from the selection of sustainable materials to the recycling after the end of use, was designed to create a beautiful and more sustainable future. The exterior of the booth used more environmentally-produced and certified materials, and reproduced the unique blue sea and sky of Hainan with linear blue LED light arrays. The entrance of the booth resembled airplane shutters, as if the booth was welcoming visitors to enter the beautiful world of L'Oréal to look at the astonishing beauty brand matrix of L'Oréal Group.
It is understood that the fixtures displayed by L'Oréal were mainly rented or reused in order to practice the concept of sustainable development. The overall building materials of the booth were made of recycled stainless steel, recycled aluminum and FSC-certified wood. The building structure was easy to separate for the convenience of future recycling.Another highlight of L'Oreal's exhibition was the exclusive release of the Biotherm X Coco Capitán limited series.
According to L'Oréal the artistic collaboration aimed to raise consumers' awareness of "how climate change threatens the health of marine phytoplankton". The brand called for working with the Earth Nature Foundation to carry outbeach cleanup activities on Wuzhizhou Island in Hainan to solve the problem of marine debris.L'Oréal also continuously presented high-tech scenes in its booth. Its brands YSL Beauté and Giorgio Armani Beauty showcased the virtual beauty and makeup color test technology, allowing visitors to simulate the use of multiple products for makeup and compare them. In addition, visitors can directly access the online booking platform of the China Duty Free Group by scanning the QR code, which makes it possible to connect the booth to the visitors digitally.
"Hainan Expo is a pioneering measure to unleash the market potential of Hainan and even the whole China. It also demonstrates China's determination to promote opening-up through a dual circulation policy, especially the domestic circulation playing a particularly important role in consumption upgrade." said Fabrice Megarbane, North Asia Region President and China CEO of L'Oréal, at the booth opening ceremony.
△Fabrice Megarbane,North Asia Region President and China CEO of L'Oréal
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Shiseido China made the first overseas sale of THE GINZA
As the first cosmetics group to confirm its participation in the Hainan Expo, Shiseido was fully engaged in this expo by bringing its two new brands - THEGINZA and BAUM - into China. The former is sold in overseas markets outside of the country of origin Japan for the first time.
Shiseido is one of the first batch of foreign-funded enterprises to enter China. This year is the 40th year that Shiseido has has been in China. Since 2017 Shiseido China has become the largest overseas market for Shiseido Group for four consecutive years and is selling more than 30 cosmetic brands.
THE GINZA, as a Japanese luxury brand under Shiseido, promotes the skin care concept of "haute couture" and has become a brand that is expensive but still sought after by consumers. This time a total of fifteen of its products entered the Chinese market.
Fujiwara Kentaro, President of Shiseido China, said: "China's domestic consumption power continues to rise, and Chinese consumers' demand for beauty is increasing and showing a diversified trend. Especially after the epidemic, Hainan has undoubtedly become an emerging shopping city. As a brand that has been cultivating the Chinese market for 40 years, Shiseido will take Hainan as a new development opportunity to enhance consumer shopping experience by continuously strengthening digital marketing. In the future, we will focus on Hainan and use this as the center to spread and convey BRAND-NEW BEAUTYMOMENTS, enabling consumers to enjoy not only the preferential policies for duty-free shopping for tourists departing from Hainan Island, but also the innovative, diverse and cutting-edge beauty of Shiseido in Hainan."
In addition, Shiseido also brought its brand BAUM which focuses on green concepts to the Expo. BAUM, launched in Japan in June 2020, is positioned as a high-end skin care product and promotes symbiosis with trees. BAUM promises to use recycled wood and recyclable materials in packaging, to provide alternative packaging, and participate in forest protection to ensure a sustainable development cycle.
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introduced the super high-end brand SENSAI for the first timeKao's SENSAI was also dazzling at the Expo.
It is understood that SENSAI was born in 1983. As a super high-end cosmetics brand, it has opened about 3,800 points of sale in department stores and beauty shops in Japan, Europe, the Middle East and other regions. With the rare "Koishimaru Silk" originated from Japan as the brand core, it focuses on presenting Japanese-style craftsmanship quality.
In fact, in the Chinese market the Kao Group was focusing more on popular brands such as Curél and Freeplus, but did not launch high-end brands.Kao has changed its beauty and makeup strategy since 2021.In January 2021, from the perspective of business strategy, Kao reintegrated the cosmetics business departments and carried out unified management to help brand cultivation, management and operations to respond more quickly to the diverse needs of consumers, and created the "Kao Beauty Brands" system with "Celebration of Individuality"(appreciating the personality and unique way of living of each individual) as the vision.At the Hainan Expo Kao emphasized its two high-end brands - SENSAI and est - with the themes "Beauty: from Japan, Facing the World, and Connected with the Future" and "High-end Brands That Kao Is Proud of", and showed the veil series products with fine fiber technology, attracting many professional visitors to stop to experience them. Kao said that it would use Hainan Island as an entry point and travel retail as a gateway to promote its business in China's duty-free consumer market and introduce its more high-end cosmetics brands to Chinese consumers.
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Johnson & Johnson appeared with eight consumer products and launched several new technology products
At the Hainan Expo Johnson & Johnson's presented eight brands, namely Listerine, Neutrogena, Dr. Ci Labo, Rogaine, Lubriderm, Johnson's baby, and Dabao, covering skin care, maternal-child, and personal care. There were many new flagship products that were globally released for the first time and customized for the Chinese market:The fourth generation of Listerine Mouthwash - honeydew flavor - made its debut at the Hainan Expo.
American professional hair growth brand Rogaine brought a new scalp care shampoo, providing a comprehensive hair growth solution for 250 million "bald heads" in China.
Anti-ageing pioneer skin care brand Neutrogena combined Chinese consumers' demand of "anti-ageing" and "tightening", bringing a new Retinol series customized for Chinese consumers, and designating China as the world's first market of the new flagship products.
As a key strategic market driven by Johnson & Johnson's dual engine of global "development + innovation", the Chinese market is not only an important growth engine for Johnson & Johnson's global business, but also increasingly becoming a global innovation engine."Johnson & Johnson Consumer Products China is an incubation center for Johnson & Johnson Consumer Products global brands. In just 5 years we have developed 10 new brands in China. This kind of 'China Speed' leads Johnson & Johnson Global," Wang Yi, President of Johnson & Johnson Consumer Products China said, "Among them, Japanese professional skin care brand Dr. Ci Labo, and North American natural skin care brand Aveeno have become leading brands in their respective fields"."The Chinese market is an important dual engine of 'development +innovation' for Johnson & Johnson's global business." Wang Yi also said, "We are delighted to see the new development opportunities brought by Hainan Province that takes innovation as the driving force, constantly plows' experimental fields', and dares to be a 'pioneer'. We also look forward to better serving the needs of consumers with more innovative and high-quality healthy consumer products by making full use of our professional advantages and better relying on the policy support of Hainan Province."On the site of the Hainan Expo, Johnson & Johnson Consumer Products officially announced that it would start in-depth cooperation with the e-commerce platform Douyin (TikTok). In the future, Johnson & Johnson Consumer Products brands such as Dr. Ci Labo, Neutrogena and Dabao will create an ecosystem with their own strong brand DNA in the field of interest-based e-commerce, and develop in-depth cooperation with the e-commerce platform Douyin (TikTok).
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Six duty-free platforms appearedDFS will create the largest beauty "palace" in HainanOn the site of the Hainan Expo, the booths of China Duty Free group (CDF) under China Tourism Group, DFS under LVMH, HNDF Haikou Duty Free Shop Co., Ltd. (hereinafter referred to as "Haimian"), Zhuhai Duty Free Enterprises Group Co., Ltd. (hereinafter referred to as "Zhumian"), GDF Plaza, Wangfujing Group Duty Free...appeared with a number of foreign-funded beauty groups in No. 5 Hall.
DFS can be regarded as the benchmark of the urban duty-free retail industry. DFS, established in Hong Kong Special Administrative Region in 1960, is the first operator in the world to open duty-free shops in urban areas. In 1996 DFS was acquired by LVMH, the world's largest luxury group. Today, DFS's store network has spread all over the world, including duty-free shops in 11 major airports around the world and 22 T Galleria stores in 13 countries/regions on 4 continents, bringing together more than 120 beauty and perfume brands.
On the second day of the Hainan Expo (May 8) DFS and its long-term business partner Shenzhen Duty-free Group signed a strategic agreement to strengthen cooperation in Hainan and pave the way for further mutually beneficial opportunities in the future.
In January of this year DFS and Shenzhen Duty-free Group jointly opened the first phase of Shenzhen Duty Free x DFS Haikou Mission Hills Duty Free Shopping City. It is understood that the second phase of the project will be completed in phases in the next two years. The project will eventually cover an area of more than 50,000 square meters, and has the largest beauty palace among the DFS global store network.
Benjamin Vuchot, Chairman and CEO of DFS Group, said: "We hope to build the most innovative and exciting store in Hainan to provide valued customers with the most outstanding luxury retail experience in combination with the latest retail technology and avant-garde concepts."With the liberalization of the "duty-free shopping policies for tourists departing from Hainan Island" in 2020, Hainan has become an important base for promoting the recovery and prosperity of global tourism retail. While the global epidemic situation is still unclear, it is becoming a reality that "global travel retail depends on Chinese travel retail and Chinese travel retail depends on Hainan's travel retail". More than one high-end beauty brand said that they would use the Hainan duty-free store as the stage for the "new product launches" and "brand debuts".
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Chinese Beauty Groups competedBloomage Biotech, Fosun International and APG Bio "showed their strength"In addition to multinational brands, there were also local beauty groups at the Hainan Expo. In No. 4 Hall and No. 5 Hall the Australian brands of Bloomage Biotech, Fosun International and APG Bio made their debut, demonstrating the strength of product research and development and seizing the opportunities of Hainan's opening-up.Among them, Bloomage Biotech participated in the expo as "the essence of domestic products", and its 10 brands, namely BIOHYALUY, QuadHA, MedRepair, BioMESO, Revitacare, BlOOMCARE, HYAPAWS, BioBurgeon, Whater, and Healing appeared.
The person in charge of Bloomage Biotech told the CBO reporter that as early as December last year (2020), Bloomage Biotech, a leading global hyaluronic acid company, formally signed a strategic cooperation agreement with Haikou National High-tech Zone, intending to establish Bloomage Biotech Industry Park in Hainan. It is understood that the Bloomage Biotech Industrial Park Project in Haikou National High-tech Zone will establish the French Revitacare China headquarters and an international business center, and introduce production lines for the local production and sales of Revitacare products.
"The Hainan Free Trade Port, to put it bluntly, is a large window and platform for international trade. We also hope to take this opportunity and enjoy opening-up policies in the aspects ranging from finance and taxation to talents and trade. We will introduce foreign advanced technology and take this opportunity to stand on the same stage with international high-quality products to promote Chinese brands." She said. Fosun Group, located in No. 5 Hall, competed with a number of international leading skin care groups such as L'Oréal and Shiseido.
In 2016, Fosun Jinmei completed its first acquisition project, Israeli skincare brand AHAVA, and started their global strategic development. Now it has formed a layout of two main brands - Israel AHAVA and US WEI Beauty and a number of independent incubation brands. In January this year Fosun Group established the Fosun Jinmei Cosmetics Science and Technology Innovation Center to further enhance the competitiveness of the cosmetics track driven by technological innovation.
At this Hainan Expo Fosun International brought its three skin care brands: Israel's AHAVA, US WEI Beauty, and Ocean Glam. Among them, Ocean Glam is a new sub-brand that was incubated and appeared on the market at the end of 2019. It is currently targeted at young people and is sold on online channels such as Tmall and JD.com.
In No. 4 Hall APG Bio Group brought its three Australian brands - light luxury fragrance care brand MOR, natural original scalp care brand Ausperi, and professional grape skin care brand Moina — to the Australian National Hall.
On the first day of the Hainan Expo, Michael Sadleir (Shang Xiaolong), the Consul General of the Consulate General of Australia in Guangzhou, came to the booth of APG Bio. Wu Zhiqing, APG Bio President, also gave a detailed introduction on the concepts and innovative technologies of the three brands.
△ A group photo of Michael Sadleir (Shang Xiaolong), the Consul General of the Consulate General of Australia in Guangzhou, Wu Zhiqing, APG Bio President and APG Bio's staffRelying on the opening-up strategy of Hainan Island, China's local beauty groups are extending the depth and breadth of their businesses by "bringing in" and "going out".
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Small and medium beauty brands gathered to seekfuel for incubation
On the site of the Hainan Expo a number of small and medium imported beauty brands such as France GELLÉ FRÈRES, Thailand Mistine, Australia EAORON, Japan Coroku also set booths and actively sought cooperation.Among them, GELLÉ FRÈRES, specially invited by the French consulate, focuses on plant-based scientific skin care, bringing five series of products and eight cutting-edge technologies to the Expo.
It is understood that GELLÉ FRÈRES has a history of 195 years and has always insisted on developing more gentle and more efficient functional products. Its 15 perfume products of "Golden Time Fragrance Series" have also won the World Exposition Award. After officially entering the Chinese market in 2013, it built a GMP 100,000 level Asian factory in Yunnan, and also spent 100 million euros to set up the Asia Research Institute and the GELLÉ FRÈRES Aromatic Plant Resource Nursery in Yunnan, China. Its Asia-Pacific headquarters is currently located in Shanghai.
On May 7 GELLÉ FRÈRES officially signed a contract with Hainan Tourism Duty Free (HTDF). The brand owner stated to CBO that China is an important market for GELLÉ FRÈRES's comprehensive layout in Asia. Hainan Expo is an important bridge for GELLÉFRÈRES to communicate with China and even the world. GELLÉ FRÈRES will firmly seize this opportunity to fully enter the global duty-free retail market in Hainan and make more and deeper investment in China's duty-free market.
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including Tmall Global and Koala Global became overseas brand incubatorsAt Hainan Expo Tmall Global held the 2021 Global Partner Signing and Investment Launch Ceremony and reached strategic cooperation with more than 100 groups and brands around the world, such as Shiseido and Dr. Ci Labo. In the coming year the groups and brands will accelerate the transformation of new products exhibited in the Hainan Expo into products sold through Tmall Global to meet the upgrading consumer demand in China.
"Over the past year, outbound travel was interrupted and online import consumption accelerated under the global epidemic. The Chinese market, which was the first to recover from the epidemic, has become the main market for overseas brands to actively seek growth." Li Lei, head of Tmall Global's global investment operations, said "Hainan Expo is an important window to showcase the construction of the Hainan Free Trade Port and can help overseas brands better understand the Chinese market. While jointly participating in the Expo with overseas brands, Tmall Global also expands the investment so that overseas brands can "open stores without experience".
Hainan Free Trade Port will also serve as a core station for Tmall Global to build overseas brands to participate in the domestic circulation and integrate into the dual circulation.According to reports Tmall Global will upgrade its import strategy of "three new (new categories, new brands and new products)" to "five new" this year and launch an innovative model of "New Industry Belt". During the Hainan Expo, Tmall International's first New World Factory under the "New Industry Belt" will officially settle in Haikou, promoting the import model of "bonded import + retail processing" in Hainan."With the unique advantages and preferential policies of the Hainan Free Trade Port, the positioning of a new international goods consumption center, a sound international shipping logistics network, and gradually improved infrastructure, overseas brands will explore more new import opportunities through Tmall Global." Li Lei said.
