NEWS
RESEARCH: COGNAC IS DRIVING ALCOHOL SALES IN CHINA’S DUTY-FREE PARADISE HAINAN ISLAND
By Siulan Law Mathews DipWSET
26-8-2021
Source: Sanya Municipal Government
Driven by high demand for Cognac, alcohol has become the second most popular product after cosmetics in China’s duty-free paradise Hainan Island, according to a research by Swiss research company m1nd-set.
The company said beauty products enjoy the highest footfall in Hainan accounting for 55 percent, followed by alcohol at 33 percent.
It was said that Cognac is the most popular alcohol category among shoppers on the island, and conversion rate is highest among alcohol shoppers, at 93 percent compared to 70 percent for beauty products.
However, the beauty sector’s higher footfall means it enjoys a higher rate of purchase at 38.5 percent than alcohol at 31 percent.
Consumers on the island are also open to trying something new, with 68 percent saying they would consider purchasing a brand or product they have not tried before.
And the highest-spending shoppers in Hainan, according to m1nd-set, are middle aged consumers from Tier 1 cities.
“With the increase in allowances, we also see a growing potential to reach Chinese shoppers who have not spent their full allowance while in Hainan” said m1nd-set Owner and CEO Peter Mohn.
“Our research analyses the level of allowances used – both in terms of volumes for liquor and tobacco or by dollar amount. Brands are using this information to reach travellers who have yet to benefit from their full allowance through post-trip marketing for online duty free shopping also.”
Apart from benefiting from COVID travel restrictions that barred Chinese tourists from travelling abroad, Hainan’s policy of lifting the yearly duty-free shopping quota for individual visitors to RMB100,000 (USD15,220) from RMB30,000 last July also boosted the growth of duty-free retails.
The province has added six new duty-free outlets this year, making it the only bright spot in the world’s travel retail sector amid travel suspensions around the world.
(the writer can be contacted at: info@thewinechronicle.com)
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