Liu Xu: Ten years of duty-free shops, what are women consuming?

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On July 11, the "2021 She Economic Summit Forum" was opened in Hainan under the guidance of the Hainan Provincial Women's Federation and hosted by China's women's financial media TOPHER, Interface News Hainan Channel, and Hainan Free Trade Zone No. 1 Financial Culture Communication Co., Ltd.

Liu Xu, Deputy General Manager of the Fragrance Commodities Department of China Tourism Group China Exemption Co., Ltd., made a speech:

Hello guests! I graduated in 2006 and came to China Exemption, and now that I have been working for my 15th year, I recall that when I first joined, the business of the traditional tax-free industry was mainly in international airports, and there were some border channels.

At that time, the main target customers were Japanese and Koreans, and we would study their consumption habits and what they liked. From the perspective of gender, at that time, most of the consumers were male, so the share of tobacco and alcohol products in duty-free products was relatively high.

But things have changed in recent years, and even in traditional international airport duty-free shops, Chinese consumers have become an absolute mainstay. This is especially true after the start of the duty-free business on Hainan outlying islands, where more than 99% of the guests are Chinese.

Gender has also changed, female consumers have gradually replaced male consumers as the main force of duty-free goods consumption, and a high proportion of products have changed from tobacco and alcohol to perfumes, cosmetics, watches, boutique bags and so on.

This year is already the tenth year of tax exemption for outlying islands, and it is reported that from April 20, 2011 to April 19, 2021, the total tax exemption for outlying islands reached 98 billion yuan. What does a female consumer look like in a decade of duty-free sales? What do they like? By observation, what do we have for female consumers?

First into "she", the women present should be one of the "she", recently many variety shows including talk shows and film and television works, "she phenomenon" has been widely recognized by the audience. In these propaganda, we strongly encourage women of different ages to express themselves confidently.

Encouraging their diversity, embracing their diversity, we no longer define a woman simply by a single label. At this moment, under the inspiration of women's self-awareness and the general environment, there have also been some changes in the tax-free business of the outlying islands.

Within ten years, the development of the tax-free business on outlying islands is also inseparable from the change of policy, from the quota of 5,000 yuan on April 20, 2011, to the relaxation of the policy to 100,000 yuan on July 1 last year, and the increase of duty-free products from 38 categories to 45 categories. Next, I will share with you the ten years of data accumulation from China Exemption's operation in Hainan.

First of all, I would like to share with you why female consumers come to Hainan.

According to the 2019 survey report, 69% of women come to Hainan for leisure, because Hainan as a holiday destination has unparalleled natural resources, and 39% of women express that coming to Hainan is shopping. The latest statistics in 2021 found that women accounted for 65% of cosmetics consumption.

See why you came, and then see where you came from? The latest statistics in the top ten tourists to Hainan have undergone some changes compared to before the epidemic, Beijing and Shanghai were previously ranked high, and now Hainan has become a travel destination for many cities, including the three northeastern provinces that were previously considered to be the main tourists in Hainan, and now they are basically not ranked so high.

How much time do they spend shopping at duty-free shops? Nearly 70% of female consumers need to complete their purchases and purchases within one day, and the proportion of women who need to control within six hours has reached more than 50%. At the same time, they will also carefully arrange before traveling, arranging shopping throughout the later stage of travel, and less than 10% of people start shopping as soon as they come to Hainan. Many female consumers are mostly traveling at home, and they are in the mood to buy and buy after taking care of their families and children.

Looking at the age portrait of consumers, female consumers aged 26 to 30 are the main force of perfume and cosmetics consumption, pulling the entire coordinate axis longer, and 21 to 35 years old are the main guests. You may ask, now consumers are so young, more years ago, is this not the case? Whether it is 2014 or 2021, in fact, the main body of female consumers is 21 to 35 years old. However, there is a feature that deserves everyone's attention, from 16 years old to 20 years old, the proportion of younger consumers in 2021 has been significantly higher than in 2014, which is also the same as the media reports, the consumer group is gradually younger.

According to the age division, the consumer group is often referred to as Gen Z, Gen Y and Gen X, and now the media is focusing on Gen Z, because this group represents the consumption trend. Three of the youngest generation's favorite perfume cosmetics category are makeup brands, and if you look at Gen Y specifically Gen X, only one of the top ten consumer brands is a makeup brand.

At the same time, the younger generation prefers the self-expression category of perfume, so although skin care products occupy an absolutely dominant position in Chinese consumption, the proportion of younger people spending on makeup and perfume products is still high. As we age, women's skincare has a high-end upgrade need, so Gen X spends more on skincare products.

Looking at some of their preferences, first of all, from the perspective of skin care products, it has gone from simple maintenance of cleansing and moisturizing to comprehensive care, and deep cleaning is indispensable. The concept of essence in the core link of skin care has also penetrated into the heart of every woman, and continuous product stacking can meet the needs. In addition, be sure to add sun protection after completing the entire skincare process. 365 days a year, rain or shine, need sun protection, because ultraviolet rays are the first major cause of skin aging.

Today's young consumers are very enthusiastic about ingredients, the selling point of each product is familiar to them, collagen, hexapeptides and other skin care concepts are also very familiar among young consumers.

Looking at makeup again, the mainstream of makeup products is still base makeup, eyebrow makeup, like some makeup control products are also essential. Because of the epidemic wearing masks, lipstick sales have been affected, but after wearing masks, consumers need to raise eyebrows, so eye makeup grows very rapidly. Now everyone needs five colored eyeshadows to choose a different color every day with a different outfit.

In the choice of color of lipstick, everyone still hopes to use different effects on the superposition, and will also share makeup tips on various social platforms, which is very popular with young consumers now. The choice of skin care products just mentioned is more rigid demand, and the skin is what to choose, but the choice of makeup also has certain requirements for personal technology.

According to past sales data, fragrance product selection has gone through a process from classic to niche. When we walk to the fragrance area and feel that we are not in a good state today and cannot find the fragrance that suits us, we will generally try the mini set of perfume, and then choose the product we want when there is a better state.

These are more like what the explosives in each category of Hainan outlying islands are: small brown bottles, small black bottles, and small light bulbs are all on the list.

Once we know their preferences, let's see what we have for them. First of all, how to solve the problem that women have a short time and want to buy and buy - e-commerce platform. Women can use the fragmented time every night to add what they want to buy to the shopping cart before the travel, and after booking the return trip, they can buy and buy, and they can continue to buy through the e-commerce platform after coming to the physical store during the day to buy it at night.

At the same time, we continue to develop the sense of experience and interaction of the e-commerce platform, what should be bought for female friends during the festival, pay attention to WeChat Weibo, and there will be a variety of themes before each festival to help you make a good choice. If you come to the store in a special festival, we will also have some exclusive experience services, which are very popular among young consumers now, exclusive lettering services, graffiti services and DIY flower basket services are widely loved by consumers.

I don't know how much shopping experience there are in the duty-free shops here, before the start of the outlying island duty-free business, a very attractive type of product of traditional duty-free is the travel retail package, and now after starting a strong outlying island duty-free business, not only has the traditional travel retail package, we will also cooperate with well-known brands every year in the free package, the combination of these products are boutique. After female consumers become the main force of shopping, they will definitely buy related products in stores.

In addition to the product, visually it also tries to attract female consumers, such as launching a pop-up store service in stores every month. In the pop-up store, women's narrative movies will be played, encouraging women to break through the shackles of tradition and let beauty make their own decisions, and I believe that every woman will have some feelings after watching it.

That's all for today's sharing. Thank you!