Introduction: No media professional understands the Hainan offshore duty free market better than Lu Tianqin, Chief TV Host of Hinews.cn Media and Head of the Duty Free Channel at Hainan Hinews Media Co, The Moodie Davitt Report’s strategic partner in Hainan.
In a follow-up to our recent exclusive interview with Tianqin, this time the tables were turned as she visited Hong Kong to chat with The Moodie Davitt Report Founder & Chairman Martin Moodie about the development of Hainan’s offshore duty free sector. Readers can view an edited video version of the full interview below.
Lu Tianqin: As a world renowned professional media and in travel retail and duty free, how do you evaluate Hainan offshore duty free?
Martin Moodie: The Hainan offshore duty free industry has been the phenomenon of recent times in the travel retail industry globally. Remember, it was just created as recently as 2011. And it has grown and grown every year exponentially to become the world-class centre of travel retail that it is today.
Every brand in the world is excited by the Hainan opportunity. So we see it as the epicentre of the business today. And through the pandemic, Hainan became the lighthouse in the business – when the rest of the world was cast into darkness, Hainan was flourishing. And that was good for everyone in the industry and good for Hainan.
海南离岛免税业是全球旅游零售业一大新势力，简直无法相信它只有短短12年的历史。自建立以来，它每年都在极速发展，如今已成为世界级的旅游零售中心。
全球所有品牌都非常想要抓住海南所带来的机遇，因此，海南被视为当今旅游零售业的心脏。疫情之下，海南成为了免税业灯塔——世界其他地方都陷入一片黑暗，海南却在蓬勃发展。这有利于业内的所有参与者，自然也有利于海南。
Chinese readers can view the film here
How aware are the international brands about the Hainan duty free market?
They are acutely aware. They already were before the pandemic, but the crisis accelerated that because the rest of the world was semi-closed. So the brands, particularly the beauty brands, were doing very strong business throughout the pandemic in Hainan.
Also, the quality of the shops plus the new stores that were added during the last two or three years have also added to the overall quality of the market. So I would say most brands across most categories are really making a beeline for Hainan now and it is a very exciting market for all of them.
他们对于海南免税市场非常的重视和了解。疫情之前就如此，但疫情加速了大家对海南的认识，因为世界其他地区的免税市场都处于半停业状态。因此，各大品牌尤其是美容品牌，整个疫情期间在海南的业务非常强劲。这是一个很好的现象。
此外，海南免税店的质量以及过去两三年开业的新店，也都提高了市场的整体水平。所以我看到，几乎所有品类的大多数品牌现在都在直奔海南，这对他们来说都是一个非常令人兴奋的市场。
We see that there are a large number of domestic brands in duty free shops in Korea and Japan. In cdf Haikou Duty Free Shopping Complex there are well-known Chinese brands such as domestic cosmetics and Moutai. Do you think that the entry of domestic brands into duty free shops and consequent sales to tourists from all over the world will be a development trend of Chinese brands in the duty free industry? Is that a good idea.
I think it’s a very good idea, really a vital idea. It’s critical that a duty free shop showcases its regional and national culture and crafts, tastes and traditions, heritage and history – these are all important things.
And if we look around the rest of the world to see how the duty free industry has developed, generally it begins with the international brands – the famous global brands. But then comes a second phase – and this is the opportunity, I think, for the Chinese brands – when national brands emerge.
You have such a magnificent history of craftsmanship and artisanship in China. So I would love to see more Chinese brands come into the market. You mentioned Moutai. Well it is the world’s most famous spirit brand. I have visited the town of Maotai to watch how it is made. What a story that is! I would like to see more of those Chinese stories take shape, and it’s good to see that it’s already happening.
我认为这是一个很好、也是很重要的想法。免税店展示其所在区域和国家的文化、工艺、品味、传统和历史传承，这一点至关重要。
放眼世界其他地区，我们看到免税行业的发展通常是从国际品牌开始。但在这些全球知名品牌之下，有一个第二层市场——这就给本地品牌、国潮商品带来了很好的机会。
中国拥有如此辉煌的手工艺及制造业历史，所以我很希望看到更多的中国品牌进入市场。你刚刚提到的茅台就是世界上最著名的烈酒品牌。我去过茅台镇，亲眼见过茅台酒是如何酿制的。这背后的故事太丰富了！我希望更多这样的中国故事被带入免税市场，而且我已经看到了这样的趋势。
What kind of Chinese domestic products will foreign friends like?
I think there will be a wide variety. If one looks at China and its history, you’ve got a great tradition of craftsmanship and of working with fabric, for example. So I think fashion and accessories with a real Chinese nuance is going to be very important.
I think you’re going to see Chinese cosmetics brands grow in importance, as you’re seeing in the local China market. And of course Moutai and other great Chinese wines and spirits have all got great opportunities. We have seen the beginning of such Chinese products starting to emerge strongly in the Chinese duty free sector and that momentum is going to accelerate.
我认为会有很多种。比如，回顾历史，中国在手工艺和织物加工方面有着悠久的传统。因此我觉得，具有真正中国特色的时装和配饰，将是一个极为重要的类别。
此外，在我看来，中国美妆品牌的重要性将会不断提高，这在中国本土市场上就已经可见一斑。当然，茅台以及其他中国著名的葡萄酒和烈酒品牌，在免税市场都具有巨大潜力。此类国潮产品已开始在中国的免税店强势涌现，我相信这种势头将会加速。
Is Chinese character in the products important?
It’s very important to reflect Chinese characteristics. When an international tourist comes to a country, they want to take away something of that country home when they visit a store at an airport or a downtown shop in Hainan. They want to take something of the Chinese culture with them, so this in my view should be reflected in the product mix that Chinese duty free retailers offer. I think they’re all doing exactly that, but you’re going to see it grow in the future.
反映中国特色当然非常重要。当外国游客来中国，他们肯定会想买一些这个国家的东西带回去，无论是在机场还是在市区的商店。他们想要带走一些中国文化，所以我觉得，中国免税零售商提供的产品选择应该要反映中国文化。我认为零售商们已经在做了，但未来会在这方面做得更多更好。
Our Nanhai.com Duty Free Channel and The Moodie Davitt Report maintain a good cooperative relationship. For example, we provide Moodie Davitt with Hainan duty free on-site coverage for the first time in the travel retail industry. What does this mean to The Moodie Davitt Report?
It’s fantastic for The Moodie Davitt Report to have such professional associates and collaborators in Hainan. This is the market where everything’s been happening for the last few years in our industry. But we of course, have not been able to get there because of the pandemic.
So to have a team on the ground of ultra professionals who bring coverage that’s really immediate and of high quality, and which shows the world what’s actually happening in the stores, is very important.
Our readers all over the world are very excited that we have this collaboration, and I know it will go from strength to strength in the future.
《穆迪达维特免税报告》能在海南拥有如此专业的合作伙伴，令我们感到很幸运。过去几年里，我们行业的重要事件，几乎都在海南发生。但是由于疫情，我们一直无法亲自到访。
因此，拥有一支专业认真的当地团队，为我们带来非常快速且高质量的报道，并向全世界展示海南免税店的现场实况，这一点非常重要。
因此，我们世界各地的读者都对双方的合作感到非常高兴，而且我相信这个合作在未来会不断深化。
Are you optimistic about the development of Hainan Free Trade Port?
I think the future of the Hainan Free Trade Port is incredibly exciting. It is one of the world’s most exciting and ambitious developments across multiple industries, from tourism to medical health to many others… you name it! It is all part of the Hainan Free Trade Port programme. What an ambition. And we are seeing it take shape with breathtaking speed.
So I think the eyes of the world are on Hainan. It is a great Free Trade Port programme. And to use the old phrase – you ain’t seen nothing yet. I think very, very exciting days lie ahead.
海南由贸港的未来真的是激动人心。这是世界上最雄心勃勃、最令人鼓舞的发展项目之一。它涉及多个行业，从旅游到医疗保健应有尽有——全都是海南自贸港计划的一部分，可见规模之宏大，而且它正在以惊人的速度建造成形。我觉得全世界的目光都在海南身上，因为这是一个很棒的自贸港计划。用一句老话说，眼见为实。我认为自贸港的未来将极为光明。
So is it possible Moodie Davitt would come to Hainan and to build a company?
It’s very possible! For the last few years it has been difficult for me to come to Hainan but now you won’t be able to keep me away! I’m living, as you know, in Hong Kong, China. And it’s a very short flight away from Haikou or Sanya. So I will be visiting very often and I hope to do much more work on the ground in Hainan itself.
很有可能！过去几年我无法来海南，但现在没有困难能把我拒之门外啦！你也知道，我现在常驻中国香港，距离海口或三亚非常近。因为，我打算经常去海南，期待在海南做更多的实地报道。
Hainan plans to build an international tourism consumption centre, what do you think are our advantages?
To answer that, you have to look at what attracts tourism and tourists to various locations around the world.
I think Hainan broadly has two major things going for it. Of course, it has a pristine, natural environment. It has wonderful beaches, beautiful clean sea, forests that are just exquisite to walk through. So it has got a wonderful natural environment on the one hand, and then you marry that to spectacular man-made attractions.
首先，我们可以想一想，在全世界来说，吸引游客、推动旅游业的因素都有哪些。
我认为海南大体上有两个主要优势。第一，它拥有得天独厚的自然环境——纯净的海滩、清澈的大海、适合漫步的森林。除了这么美妙的自然环境，海南还有一个壮观的人造环境，而且两者相辅相成。
Look at the developments going on around duty free shopping. You have two of the world’s great downtown duty free stores in Haitang Bay and Haikou. Consider the recent development in Haikou by CDF. It’s astonishing in its ambition. There is nothing like that in our industry.
And you’re seeing a lot of tourism infrastructure development, with mixed leisure facilities and a lot more top-class hotels and restaurants, theme parks, and a big emphasis on museums and culture. So it’s all coming together to create a really wonderful combination of natural environment and man-made attractions. I think many more people will be making their way towards Hainan in the future. I certainly will be.
再看免税购物方面的发展。世界上最大的两家市区免税店好像都在海南。不是“好像”，它们就在海南！中免最近在海口开的新店实在太惊人了。业界没有其他免税店能与其媲美。
此外，海南的旅游基础设施也得到了长足发展，有各类休闲设施，以及更多顶级酒店和餐厅、主题公园，而且高度重视博物馆和文化活动。所以我认为这一切都汇集在一起，创造了自然环境和人造景点的完美结合。未来必定会有更多的游客到访海南，我就是他们其中的一员。
I think international visitors to Hainan are going to be interested in a whole range of Chinese products, whether they be related to the heritage of China being so associated for example with cloth, with apparel. There is a huge opportunity around Chinese fashion. You have exquisite designs and exquisite quality of raw material.
Another interesting dynamic has been to see the Chinese beauty industry emerge very fast, with very high-quality products. I’m talking cosmetics and skincare principally, but I think there is also an opportunity for fragrances. Fragrance is a very fast-growing category in the world. And it’s not just about the famous international brands anymore. It’s more and more about the niche brands.
我认为到访海南的国际游客会对各类中国产品感兴趣，尤其是与纺织品、服装这些与中国历史传统相关的产品。我觉得，国潮时装的机遇无穷。中国服装设计精美，使用的原材料质量非常高，因此可以在这方面着力进行发展和宣传。
另一个有趣的现象是中国美容行业正在迅速崛起，推出很多高水准的产品。化妆品和护肤品是一方面，但我认为香水类别也大有看头。香水是全球增长非常快的一个类别，而且这个类别不再只是国际品牌一枝独秀。小众品牌，特别是在香水这一块，正在异军突起。
I think many young people, for example young women, coming to China, will be attracted by the fact that there is a Chinese fragrance that they can take away. And of course, one has to look at Chinese wines and spirits. You have an ancient heritage of producing great Chinese wine and spirits. Moutai is, of course, the most famous example but there are many others.
When I shop in a foreign country, I am looking to wait to take away a taste of that country, literally a taste. And I can get that in a Moutai or another famous Chinese wines or spirits. But I am also looking perhaps for something for my family or my friends and colleagues. And therefore I will be looking more in the gift area – something cultural to take away.
我想很多来中国的年轻游客，尤其是女性，会有兴趣购买本地制作的香水。当然，中国的酒类产品也很值得一看。中国拥有生产优质葡萄酒和烈酒的悠久传统。茅台当然是最著名的例子，但并不是唯一的，还有很多其他的好产品。
当我在国外购物时，我一定会想要品尝当地的滋味，并把这个味道带回家。茅台酒及其他著名的国产酒类就能为游客提供这样的纯正中国味儿。同时，我也会想给家人或朋友、同事寻找一些他们会喜欢的东西。因此，礼品类别也很重要，给游客们一些可以带回家的当地文化。
There is also an opportunity around food. Hainan is an abundant area for producing great foods and snacks. They are always popular with tourists. So there is a whole spectrum of opportunity for the retailers and I really hope that they will build on that so that their duty free stores in Hainan will become whole enclaves of great and attractive Chinese products.
我觉得食品类也可以有大发展。海南是一个美食盛产区，而食品永远都很受游客欢迎。因此，这个类别对零售商们来说潜力无限，我希望他们能以这些重要品类为基础，让旗下的免税店成为弘扬国货魅力的集中展示平台。
So you’re coming to the Hainan Expo?
Yes I am, it’s my first time to the Hainan Expo. I wasn’t able to come in previous years because of the border constraints. Now I can and I’m so excited. It’s been a spectacular success over the first two years and the third Hainan Expo promises to be the biggest and best yet.
I’m visiting Hainan in early April and I can’t wait not just to go to the Expo but to visit all the duty free retailers and also to tour the island to discover the wonderful attractions of Hainan. I will spend some time traveling around and hopefully coming to your offices and seeing you and the Hainan Hinews team as well.
是的，这将是我第一次参加海南消博会。前几年由于入境限制，我无法到场。现在终于可以亲自去海南，我太激动了。头两届消博会均取得了巨大成功，第三届有望成为迄今为止规模最大、质量最高的一次，所以我一定不会错过。
我会在四月初来海南，不仅要去看消博会，还要参观所有的免税店，并游览海南，探访岛上各大景点。因此，我将多花一些时间四处走走，希望还能参观你们的办公室，与南海网团队亲自见个面。
What are the key characteristics of the China and Hainan duty free and travel retail markets.
Well, the key characteristic of the China travel retail market is in Hainan itself. Hainan in China is one of only three examples in the world where national citizens can travel domestically or within their country, and buy duty free. So it’s a really good model introduced in Hainan in 2011.
The Hainan market has grown much bigger than the other two, one in the Republic of Korea, and one in Japan. It’s become one of the key duty free markets in the world. So that’s the standout of China travel retail in recent years. And within that market in Hainan, what we’ve also seen as a characteristic is the rapid growth of beauty products, particularly skincare.
中国旅游零售市场的一大特色就在于海南本身。在海南，本国公民可以在境内旅行时购买免税品，这样的例子全球仅有三个。这是于2011 年在海南推出的一个非常好的免税模式。
另两个类似例子分别位于韩国和日本，但与它们不同的是，海南市场如今已经发展得非常之大，已成为世界上最主要的免税市场之一。这就是近年来中国旅游零售业的重中之重。在海南市场我们还看到另一个特点，那是美容产品，尤其是护肤品业务的快速增长。
So for the beauty houses of the world, the famous ones, Hainan’s offshore duty free industry is an epicentre of their business. And you can see that by the focus they all put on this particular market. Elsewhere in China you’ve also got a traditional duty free business – when people such as yourself Tianqin can travel abroad and buy on departure at an airport. And that’s also developed very fast over the last five to ten years.
An important hallmark of what’s happened, whether it be in downtown retailing or airport duty free retailing, is the rise and rise in quality. I am talking about quality of shops, of design, of fit-out, of merchandising, of product range. The other area of improvement is in staff knowledge and staff training because those frontline staff are very important to the ultimate success of the business.
So overall, the China travel retail market has just soared in importance over recent years. It is vibrant and retains huge growth potential.
因此，对于全球所有知名美容品牌来说，海南离岛免税市场是他们业务的重心。你可以看到，他们对这个特定市场有多么的关注。当然，在中国也有传统的免税业务——国人可以出国旅行，并在机场离境时购买免税品。在过去的五到十年里，这类业务也发展得非常快。
我认为所有这些发展，无论是市区免税零售、还是机场免税零售，它们最值得关注的一大特点就是其质量在不断提高——不管是门店设计、商品陈列，还是新的产品和系列。员工的专业知识和和培训也非常重要，因为一线员工的素质是企业实现的最终成功的关键一环。
总而言之，中国旅游零售市场的重要性在最近几年持续飙升，其活力和增长潜力令人惊叹。✈
