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 seeing more reasons to do their high-end shopping locally in the tax-free island of Hainan .

On Wednesday, thousands of travelers in Hainan city of Sanya packed the CDF Mall, a shopping mall for duty-free shops, where they stocked up on cosmetics and handbags during the Lunar New Year holiday break.

“Britain is quite far away and it’s difficult to buy tickets,” said Yu Shunxiao, a student who said he used to shop at Harrods in London. “In Sanya we can come and go as we please.”

In early January, following a broader nationwide relaxation of COVID-19 prevention guidelines, Beijing ended a long-standing requirement that all inbound travelers be quarantined at a hotel immediately upon arrival.

As a result, Chinese residents have rushed to travel abroad. On Trip.com, a popular ticket-booking site, international airline ticket purchases skyrocketed by over 200% the day after the policy change was announced.

Luxury brands and retailers are hoping an upcoming outbound tourism boom from China will lead to strong sales in 2023 as the post-pandemic frenzy cools in the United States and Europe. Continue reading

Even so, some experts argue that even though consumers are now free to travel, an increasing proportion of China’s luxury spending will remain within the country’s borders.

Jonathan Yan of the Roland Berger consultancy in Shanghai told Reuters that the three-year border closure has made Chinese shoppers more accustomed to buying foreign luxury goods in China.

“Part (of luxury buyers) will return to the original pre-COVID overseas consumption,” Yan said. “But I think that the local (luxury market) will also be important for most brands.”

reporting by Alessandro Diviggiano in Sanya, writing by Josh Horwitz in Shanghai; Edited by Raju Gopalakrishnan

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