INTERVIEW
Israel Assa on delivering ‘the best of beauty’ to Hainan travellers
The Estée Lauder Companies Global President Travel Retail Israel Assa
Introduction: The Estée Lauder Companies (ELC) Global President Travel Retail Israel Assa talks about the US beauty giant’s ongoing partnership with the world’s number one retailer, China Duty Free Group (CDFG), and how its latest slew of store openings in the Global Beauty Plaza represents the next stage of their collaboration.
He also discusses ELC’s ongoing commitment to ‘reimagining the retail experience’ in Hainan and bringing the best of its powerful portfolio of beauty brands to surprise and delight the Chinese consumer.
While ELC’s ongoing challenges in Hainan have been well documented, the company has remained steadfast in its investment and commitment to the region, and particularly to its over ten-year partnership with CDFG.
This ongoing partnership has reached a new milestone with the opening of the Global Beauty Plaza (Block C), where ELC is unveiling a dazzling array of flagship stores, some with the biggest retail footprints in the world and others with a menu of luxury services never before seen in the channel.
The architecture and interior design of the Global Beauty Plaza offers a unique ambience and style while forming a cohesive connection between the new block and other structures in the complex
The Global Beauty Plaza (Block C) signals the travel retail giant’s strong and unwavering commitment to growing and elevating the offshore duty free market in Hainan. The 78,000sq m complex is home to some of the most impressive flagship boutiques and brands in the world and will play a significant role in cultivating the wider perfumes & cosmetics category in the region.
“Firstly, on behalf of The Estée Lauder Companies, I want to congratulate CDFG on the opening of the Global Beauty Plaza,” Assa says. “The perfumes & cosmetics category continues to be a growth driver for the travel retail industry, particularly in Hainan and China.
“Thanks to CDFG’s vision, commitment and confidence in the perfumes & cosmetics category, our brands are able to lead the way in providing the right product offerings, beauty services and luxurious experiences to the traveling Chinese consumer. As consumers increasingly look to relax and recharge when they travel, we’re committed to reimagining the retail experience and taking it to new heights.”
The world’s biggest Estée Lauder flagship
The second floor of the Estée Lauder flagship boutique in the Global Beauty Plaza is occupied by the Skin Longevity Institute, a space dedicated to its prestige Re-Nutriv line. It has two full-service facial cabines where guests can be treated to a menu of personalised services powered by Skin Longevity Science. Re-Nutriv has been reformulated with Sirtuin activators which reverse the signs of ageing at a cellular level. Estée Lauder’s proprietary SIRTIVITY-LP technology helps activate different Sirtuin proteins, promoting the skin’s ability to look and act younger, empowering visible age reversal at the cellular level. Another key ingredient is Black Diamond Truffle Extract.
“CDFG and ELC have been strong partners in bringing the best of our brands to the visitors of this beautiful island”
ISRAEL ASSA
According to Assa, the boutiques are the pinnacle of luxury beauty retailing and represent a new chapter for The Estée Lauder Companies’ historically strong Hainan presence. He says: “As the global leader in prestige beauty within travel retail, we remain steadfast in our commitment to Hainan, a critically important market that will help drive the next generation of growth for our industry and ELC.
“Since the opening of the cdf Sanya International Duty Free Shopping Complex in 2014, CDFG and ELC have been strong partners in bringing the best of our brands to the visitors of this beautiful island; for many, their first exposure to our brands.
“With the expansion of the mall and the shift of our brands’ stores into the new Global Beauty Plaza in Block C, we can offer shoppers an unprecedented level of brand experiences complete with the most desirable products, high-touch luxury services and exciting brand events that will make visiting Block C a must for visitors to Sanya.
“We have developed strong relationships with the Chinese consumer travelling to Hainan over the past ten years. There is still so much opportunity for growth, particularly in Hainan, the preferred local travel destination for middle-class and affluent travellers, a population that Boston Consulting Group estimates will grow by 80 million by 2030[1]. We have designed our brands’ retail experience to deepen those existing relationships, introduce all that our brands can offer to new consumers while laying the foundation for strong consumer relationships for years to come.”
An unprecedented level of brand experiences
The stores themselves, which offer a suite of retailtainment and beauty tech services, are a testament to ELC’s commitment to China excellence. For example, Estée Lauder’s new store will be the largest Estée Lauder store in the world across all channels of distribution – not just travel retail.
Assa adds: “We are privileged to have a partner like CDFG who believes in pushing the boundaries of what’s possible in retail and provides the space to make our brand presence in Hainan a destination in and of itself.
“La Mer’s Spa de La Mer will offer four different branded facials, including the brand’s Signature Facial. This exclusive service is offered for the first time in travel retail Asia Pacific and allows consumers to completely relax across all five senses. The new Kilian Paris store will have travel retail’s first-ever event-ready juice and cocktail bar in-store featuring fragrance-inspired cocktails.”
“Visitors to our MAC store can book appointments at the MAC Makeup Studio to get their makeup done with exclusive looks for a night out on the island. Bobbi Brown will introduce a Brow Studio for personalised artistry service offerings and our Aveda brand will welcome consumers to its new Head Spa, where guests can indulge in a personalised spa experience with comprehensive scalp consultations.”
Looking ahead, Assa sees the stores as a test bed for new technologies in AI and Web3 that will evolve ELC’s already dazzling portfolio of brands to the digital age. He says: “We are extremely excited about the opportunity that AI represents for travelling consumers and we are working with global partners on how we create space within the travel retail environment to leverage these digital enablers. We absolutely see our new stores at the Global Beauty Plaza as fertile testing ground for future activations, piloting technologies and tools to further engage digital natives and tech-savvy consumers.”
Travellers can enjoy exclusive scalp and hair treatments at the Aveda Head Spa
The Bobbi Brown store offers its signature Brow Services
Shoppers in Hainan can relax at the Spa de la Mer and experience the brand’s luxury Signature Facial
In Q2, organic net sales for The Estée Lauder Companies fell by -8% organic (organic sales in global travel retail fell by -28%) reflecting the inventory and daigou-related challenges in North Asia travel retail as well as a softness in Mainland China’s prestige beauty business.
However, as advised in the company’s recent earnings call, the company predicted that the wider company would return to +3% to +5% growth in the third quarter (with organic sales growth outlook ranging from +4 to +6%).
A key driver of this growth is a commitment to delivering the best of beauty in Hainan, a region which The Estée Lauder Companies views as crucial to the health of its overall business, despite recent challenges.
Assa explains: “The Estée Lauder Companies remains committed to bringing the best to the Chinese consumer, and our exceptional brand portfolio and strong, internal marketing coordination throughout China across key distribution channels are critical to meeting the Chinese consumers where they are.
“Travel retail remains an important channel for Chinese consumers, as well as ELC, and destinations like Hainan enable us to tailor our brand and product offerings to match the mindset of the consumer when they are on vacation. We know visitors to Hainan are hoping to have an experience that enhances their journey – they expect brands to understand that when on holiday they want to relax and pamper themselves, as well as to shop. Our brand offerings in the new Block C wing enable us to give just that.”
In the last ten years, ELC and CDFG have partnered for countless store openings and blockbuster beauty animations in Hainan. Their partnership has led to the creation of some of the most memorable launches and campaigns in the region and according to Assa is only just beginning.
“We are honoured and proud of our over ten-year relationship with CDFG in Hainan. As brand builders, we appreciate our close partnership with CDFG and their dedication to creating shopping meccas for the travelling consumer that enable brand-equity building retail flagships, as well as exciting experiences and events.
“Travel is all about discovery – and for many visitors to Hainan, CDFG’s malls enable Chinese consumers, particularly from lower-tier cities, to discover our ELC brands in person for the first time. The fact is that Hainan is the destination of choice for the considerable runway of this emerging middle class and it’s here where we are building world class flagships. Hainan has truly become our hub for both recruitment and brand equity-building.
“CDFG is at the forefront of creating the best experiences in the right shopping environments for the traveling consumer and we look forward to setting the retail standard over the next ten years alongside this incredible partner.”
“As consumers increasingly look to relax and recharge when they travel, we’re committed to reimagining the retail experience and taking it to new heights”
ISRAEL ASSA
Glorious Renewal
For Lunar New Year, ELC and CDFG once again joined hands to launch La Mer’s ‘Glorious Renewal’ pop-up store within the Global Beauty Plaza. The animation, La Mer’s first travel retail-exclusive experience of 2024, opened on 5 February and features a vibrant Year of the Dragon design. Artwork by Chinese paper-cutting artisan Zhang Xiaodong anchors the pop-up, surrounded by Lunar new Year-themed experiences and gifts.
A colourful three-metre dragon scroll artwork, created using traditional Chinese paper cutting and binding techniques, serves as the inspiration for the animation
“The Estée Lauder Companies Travel Retail (ELC) is a significant strategic partner of CDFG. With the new Global Beauty Plaza at the cdf Sanya International Duty-Free Shopping Complex in Haitang Bay, we sought to present to our guests in Hainan a renewed discovery of beauty wonders and experiences.
“We are delighted to welcome the prestigious beauty portfolio of ELC to our project. It has been great to work with our ELC partners to provide our guests with new premium services, bespoke experiences and a wealth of selections. We thank ELC for our collaboration to realise this new landmark of Hainan international tourism and consumption. We look forward to an even bigger and better business relationship.”
- China Duty Free Group Vice President of Central Merchandising Division Lee Mei Li
[1] https://www.bcg.com/publications/2023/next-chapter-in-chinese-consumer-market
Spotlight Series - March 2024
Social share