Red-letter day: Lagardère Travel Retail expresses pride in Sanya opening with Hainan Tourism Investment

CHINA. “It’s been a big stretch for everybody. But it’s been very gratifying.” Speaking to The Moodie Davitt Report on the eve of the Hainan Tourism Downtown Duty Free Shopping Complex opening  in Sanya, Hainan province today, Lagardère Travel Retail CEO North Asia Eudes Fabre says that while the store opening timeline has been daunting, he is immensely proud of the end result.

The French travel retailer has a strategic agreement covering supply and services with licence holder Hainan Tourism Investment Duty Free Co Ltd (HTI, a wholly-owned subsidiary of Hainan Tourism Investment Development Co Ltd). When the store in the bustling Jiyang district of Sanya was inaugurated at 10am this morning, it was a proud moment for all the stakeholders.

We will bring you an interview with Hainan Tourism Investment Duty Free Co in coming days.

The 95,000sq m gross surface includes a 2,500sq m bonded warehouse, a small supermarket, and a food court. The store is extremely well positioned in a central Sanya location that enjoys close proximity to the key beaches and resorts. Hainan Tourism Downtown Duty Free Shopping Complex is 15km from Sanya Phoenix Airport; 5km from Sanya Bay; 2km from the inter-island Lizhigou expressway; and 6km from the Sanya high-speed railway station.

The site is near wetland parks, and surrounded by high-end residential buildings, large-scale supermarkets, cinemas, and various high-end retail.

HTI and Lagardère Travel Retail have brought 278 brands to Hainan for today’s opening. Product categories including perfumes & cosmetics, fashion & accessories, watches & jewellery, wines & spirits, confectionery & fine food and toys across more than 30,000sq m of retail area over five floors.

Over a dozen of these brands are new to Hainan, said the partners. These include Dyptique, Byredo, Gucci Makeup, Victoria’s Secret, Blancpain, Hublot, Fred, MaxMara Weekend and Lanvin.

Importantly, it is also adjacent to the spectacular stage performance attraction ‘Sanya Eternal Love’, one of the island’s top tourist magnets, which draws some 4.5 million visitors each year.

“The location is very different from Haitang Bay [home to the CDF Mall -Ed],” says Fabre. “Instead of being in a resort area, we’re in the middle of downtown… what they are calling the future Sanya CBD. We could not be more central in Sanya, which puts us close to all the key beach areas. Next to us is the performance venue, which has millions of visitors per year. So in terms of traffic and connectivity, it’s really good.”

Likening the opening timeline to “Mission Impossible”, Fabre says that being able to deploy Lagardère Travel Retail’s sizable team in China was crucial to delivering the end result on time. “We were able to leverage the fact that we have a big team in place in China who were available to go to Hainan… and the fact that we have all the brand connections.

“We have a huge team in Hainan now of 80 people and we’ve had dozens of people working on this project pretty much every day since early September. So it’s been a monumental undertaking, especially to cover so many categories. We have beauty, of course; a full liquor assortment; a full fashion assortment; we have watches, jewellery, confectionery, and electronics. And there are specialty niche brands such as Victoria’s Secret that are cross-category.

Brand support has been generally positive, especially considering the daunting timeline. Managing sensitive commercial negotiations in such a timeframe and against the backdrop of a global pandemic has been challenging, Fabre points out.

“We’ve gotten a lot of brands on board for the grand opening… and quite a few that will be exclusive and new to Hainan. So we’ve worked hard to differentiate ourselves from CDF. We have a very nice line-up. Initially we will have a lot of pop-ups and temporary shops, but it will look good and be credible – our customers will not be disappointed when they walk into the door. And then due to the coronavirus and production and logistics issues, some of the key brands will only be ready in January.”

Hainan Tourism Downtown Duty Free Shopping Complex exclusives include Dyptique, Byredo, Gucci Makeup, Victoria’s Secret, Blancplain, Hublot, Fred, MaxMara Weekend, Lanvin and others.

“It’s been a big achievement, and I am very grateful for the great support we’ve had,” says Fabre. “It’s been a great cross-border collaboration between our team in Shanghai, our buying teams in Hong Kong, and our central teams in Paris. So it’s all come together. Overall, the brand response has been really good because obviously everyone wants to be part of the Hainan story. For every brand, Hainan is their most productive door. Even before corona and especially now since corona.”

Fabre says that Hainan Tourism Downtown Duty Free Shopping Complex will major on the customer experience, seeking to strike the right balance between the huge volumes involved in the Hainan business and brand image. Lagardère Travel Retail plans to be open in its communication with the brands in terms of who the customer is and to underline the fact that offshore duty free is not eating into the Chinese domestic market, he adds.

Fabre pays tribute to the strength and partnership of Hainan Tourism Investment Development (HTI). “I think the biggest advantage we have is our partner HTI. Their core business is travel and transportation – they own core sites, they own hotels, they own ground transportation assets.” They also have the whole-hearted support of local government, he adds, underlined by the widespread store signage that has been installed around the municipality and the implementation of a pick-up counter at Sanya Phoenix International Airport.

“HTI has been great. Their support and scrutiny have really helped us unlock a lot of the issues encountered and put us in a good position to promote the image of our store. And the potential synergies with their transportation and other tourism assets, that’s just huge.”

Heavy marketing campaign

With the store built and brands steadily coming onboard, the next challenge is footfall and Fabre says the alliance is implementing a sustained marketing campaign across traditional out of home media (in Hainan and on the Mainland), television, print, and various social networking services.

“The other point which will drive traffic is the scale of the store and the diversity of the offer,” he adds. “Because it’s a big and diverse offer by any standards. So we’ll have the critical mass that really makes it worthwhile. We’ll have the key brands, especially in the beauty space where we’ll have a complete brand offer and a lot of new, exclusive and niche brands that can’t find space elsewhere in Hainan.”

Reflecting on the work that has gone into today’s opening, Fabre concludes: “It’s been like a whirlwind. Our team is definitely looking forward to having it open and taking some time off after CNY, just because it’s been absolutely non-stop. I am so proud of what we’ve done, and I don’t think anybody else could have pulled it off.”