The Chinese lunar year of the Snake has not started well for Hainan, the tropical island province with ambitious plans to create the world’s biggest and most dynamic duty free shopping business worldwide. During the dark years of the pandemic, Hainan proved a lifeline for the travel retail industry when many other international travel locations were effectively closed due to Covid-19 restrictions.
Unfortunately, Hainan has not proved immune to China’s sluggish post-pandemic recovery, with its real estate market downturn, weakened consumer spending and reduced overseas investment. According to recently published figures from the island’s Customs authority, Hainan suffered a 29.3% drop in duty free sales last year, driven by a nearly 16% drop in shopper numbers.
Curiously, the island enjoyed an 8% increase in visitor numbers during the year, which suggests there is more behind Hainan’s retail slump than solely Chinese holidaymakers having less discretionary income to spend. Commentators believe Chinese tourists are increasingly favouring experiential activities over shopping. Others point to China’s continued crackdown on ‘daigou’ shuttle traders who previously would purchase goods cheaply in Hainan and then resell them on the mainland.
When it comes to the Chinese travellers venturing further a‑ eld than Hainan, new data from digital solutions provider China Trading Desk (CTD) suggests a major shift in the make-up of this key customer demographic occurred last year. According to CTD’s research, 40% of outbound Chinese international travellers were first-timers, many of whom head to Singapore, Japan and Thailand. Predominantly young, urban and digitally savvy, these consumers invariably hail from Tier 1 and Tier 2 Chinese cities.
These newcomers to international travel are aspirational in terms of their shopping habits, CTD’s survey shows, but being middle-income earners, they are also budget conscious and rely heavily on digital tools for research and purchases. Chinese travel apps such as Ctrip/Qunar (20%), Xiaohongshu (18%) and Douyin (12%) are the preferred channels for outbound trip planning, and digital payment options like Alipay and Wechat Pay are their preferred way to pay.
Artistic partnerships
Whether it is these first-time travellers or China’s domestic ‘duty free business’ of Hainan, it is clear the Chinese travel retail business is undergoing some important shifts that the wider industry needs to track and adapt to. For the moment, many drinks brands tend to rely on annual, limited-edition Chinese New Year releases to target this key customer group, often partnering with celebrated Chinese artists.
For instance, a special edition of Johnnie Walker Blue Label, commemorating the Year of the Snake, features artwork by James Jean, a prominent Asian-American visual artist. Jean’s intricate design offers a fresh interpretation of the 2025 Chinese Zodiac sign, showcasing three distinct snake figures symbolising wisdom, intellect and intuition.
These snakes are portrayed in the process of shedding their skin, surrounded by flourishing blossoms, creating a visual representation of embracing transformation and fresh starts. Similarly, the high-end Italian wine label Masi has partnered with China Duty Free Group, China’s largest duty free retailer, to launch a limited-edition Amarone Classico 2019: Nectar Costasera Lunar – New Year of the Snake. The winery describes this zodiac sign as representing qualities such as contemplation, grace and sagacity. The special Year of the Snake packaging showcases a stylised serpent in gold coiled against a vibrant red background.
These upscale launches come at an interesting time for the wider Asia Pacific travel retail market. On the one hand, the region is expected to enjoy surging air traffic growth in 2025, with markets such as China, India, South Korea, Japan, Taiwan, Singapore, the Philippines, Hong Kong, Thailand and Malaysia all predicted to enjoy robust, double-digit growth, according to travel retail research firm M1nd-set.
On the other, travel retail spending per passenger, especially among Chinese travellers, is likely still to be below pre-pandemic levels. It’s not surprising that both South Korea and Taiwan have recently made their duty free allowances more generous. In the case of South Korea, the inbound two-bottle spirits allowance has been scrapped (provided the total volume doesn’t exceed two litres or $400 in value). Meanwhile, Taiwan has raised the value of its duty free allowance from NTD20,000 ($607) to NTD35,000 ($1,062).
While the premium and super-premium price brackets may come under pressure in many travel retail markets this year, the luxury end of the market appears to be in rude health if the number of luxury single malt releases is anything to go by. In December, for instance, William Grant & Sons partnered with Mumbai Airport’s Ospree Duty Free to launch The Balvenie Fifty Collection First Edition, priced at $58,450. Only 13 bottles of the rare malt have been allocated in travel retail globally.
Similarly, in the same month, Pernod Ricard GTR unveiled the prestige The Glenlivet 40 Year Old with Lotte Duty Free at Singapore Changi airport, priced at around €5,500. One of several releases created to celebrate the famous Speyside distillery’s bicentennial in 2024, the cask-strength whisky will initially be exclusive with Lotte Duty Free at Changi before a wider travel retail roll-out later this year.
Demand for these luxury releases remains high, but the wider travel retail business needs to adapt to a fast-evolving retail landscape. As consumers shift towards experiential travel, digital-first behaviours, and value-conscious spending, the industry must pivot to meet their needs. The Year of the Snake symbolises transformation, and for Hainan and the wider travel retail sector, embracing this spirit could turn today’s challenges into tomorrow’s opportunities.
