Government and Trade

Bullish on China’s Duty-Free Future, LVMH, Kering Show at Hainan Expo

Bullish on China’s Duty-Free Future, LVMH, Kering Show at Hainan Expo

SHANGHAI — The tropical city Haikou in Hainan hosted the second China International Consumer Products Expo this Tuesday.Postponed from April to July due to COVID-19-related restrictions, the second edition of the Expo featured more than 1,322 brands from 58 countries and regions. The Expo is the largest consumer products exhibition in the Asia Pacific region.
LVMH Moët Hennessy Louis Vuitton, Kering, Richemont, Tapestry and Burberry were among the luxury and fashion exhibitors at this year’s fair, showing their commitment to the nascent event and Hainan’s future as a free-trade port shopping paradise.
Andrew Wu, LVMH group president of Greater China attended the Expo to sign a partnership agreement with The Haikou Integrated Free Trade Zone. LVMH will set up a bonded warehouse in the zone dedicated to the group’s perfume and cosmetics travel retail business.

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“We have established our presence here through pop-up shops and other retail formats. In the future, consumers all over the world will come here to shop, we think Hainan is very important, and we are highly optimistic about the market,” said Wu.
LVMH Moët Hennessy Louis Vuitton brought DFS Group, Hublot and Moët Hennessy to the show.
Despite media speculation that Louis Vuitton might set up shop in the zone, the brand denied claims that it is considering any options within the licensed duty-free market.
Kering highlighted jewelry brands Boucheron and Qeelin at the Expo, where the Hainan Gibbon Bo Bo piece made its debut. The unique item will be auctioned off by Christie’s, with proceeds donated to Hainan Provincial Forestry Bureau to support the Hainan tropical rain forest and Hainan gibbon conservation efforts.
Burberry brought a range of products to the fair, including the signature Lola bag and TB Summer Monogram collection. It’s one of the few luxury brands with products that can be directly purchased at the booth.

An exhibitor works at Burberry booth before the 2nd China International Consumer Products Expo at the Hainan International Convention and Exhibition Center.

VCG via Getty Images

As an extension of the Lola bag pop-up series, Burberry created an immersive camel-colored space with metallic frames, large golden chains from the ceiling, and merchandising shelves that echoed its iconic Check. The brand also brought along Chinese influencers to celebrate the event.
In April, Tapestry announced Hainan as the new headquarters for China travel retail. The American fashion group showcased Coach, Kate Spade and Stuart Weitzman products at the Expo.
With COVID-19-related travel restrictions, mainland China shoppers had to trade shopping in Paris, London or Milan for shopping locally. According to Bain & Company, the Hainan-trade port has become an emerging market for luxury goods, accounting for 13 percent of sales nationwide in 2021.
Bain & Company believes China’s luxury market will pick up the pace of recovery and return to 2021 levels by the end of this year or early 2023.
“With retail projects like Haitang Bay on the rise, more non-duty-free businesses launching here, Hainan free-trade port’s strategic position will become more prominent,” said Xing Weiwei, partner at Bain & Company.
Set up by Hainan in 2021, the free-port zone aims to become the world’s largest duty-free consumer market by 2025, with sales exceeding 160 billion renminbi, or $23.7 billion. Hainan Expo serves to showcase Hainan’s ambition and promote consumption.

Brazil Must Step Up Sustainability Efforts, Report Says

Brazil Must Step Up Sustainability Efforts, Report Says

MEXICO CITY — Brazil must bolster efforts to build a more sustainable fashion supply chain amid claims of rising pollution and deforestation in its key cotton, polyester and viscose production process, according to a new report.
The study, called “Fashion Threads: Systemic Perspectives for a Circular Fashion,” reveals that emissions from the country’s cotton farming and production chain, the world’s second-largest exporter, have reached critical levels while textile waste remains a growing problem. Textile garbage, including manufacturing residues such as fabric, clothes or patchwork, has risen to as high as 330 tons daily in some parts of Sao Paulo State, for instance, revealed the survey, the first of its kind to be published in the country.

This is making Brazil, also the world’s fourth-largest denim producer, a key contributor to global fashion emissions, according to the report, which was funded by Dutch advocacy group Laudes Foundation, formerly the C&A Institute, and prepared by circular fashion and green consultancies Regenerate, Modefica and Brazilian think tank Fundação Getulio Vargas.
To fix the problem, the authors recommend that the bulk of cotton, polyester and viscose production, and other synthetic fabrics, be replaced with alternative and more environmentally friendly alternatives and calls on the country to do more to promote circular fashion or recycling to extend a product’s life cycle.

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“We should be looking to replace cotton, polyester and viscose with agroecological cotton, recycled PET bottles and certified viscose,” Regenerate Fashion’s Brazilian manager Larissa Roviezzo told WWD. “All of these have a lower environmental impact than conventional fibers.”
Brazilian cotton production is largely mono-cultural, reusing landfields, employing machines and using harmful pesticides and fertilizers “that reduce biodiversity and makes the soil vulnerable, [to contamination] which can bring disease,” Roviezzo noted. By transitioning into agroecological, or more traditional farming, methods that rotate fields and allow farmers to mix cotton harvesting with food, eliminate chemicals and save water, the process can become more sustainable, she explained. She added that some Brazilian firms, such as Organic Cotton Colors and Justa Crema, are increasingly demanding agroecological cotton.
As polyester production is energy intensive, it should be increasingly replaced by recycled polyester such as that using PET plastic bottles, production of which has been increasing but not enough to make a positive impact, Roviezzo said, adding that only 311,000 tons of PET bottles were reused in 2016.
Viscose production, however, is more problematic. Brazil makes the fabric’s main raw material, soluble cellulose, and exports it to China, which then makes the final product for worldwide distribution, including for Brazilian apparel makers. But making soluble cellulose has become a very polluting enterprise, with only two firms, Bracell and Jari, in charge of the process but providing very little information about how and where they are making cellulose pulp.

Roviezzo said, “To make cellulose, they cut trees in the Amazonia but we don’t know exactly where.”
Brazil must move into certified viscose production such as that vetted by forest protection organizations including the Forest Stewardship Council and Canopy which ensure these fabrics are sourced sustainably to avoid deforestation and bring social and economic benefits to the communities involved, the survey recommended.
Last but not least, circular fashion should become a higher priority with the government boosting its commitment to circular fashion by providing recycling bins, such as those used in other countries, and enacting laws to minimize or ban textile manufacturing waste. In tandem, producers should invest in new recycling facilities while designers should be encouraged to dream up products with reusable fabrics.
“We need a systemic change,” Roviezzo noted. “Europe has textile waste bins for post-consumption items but they don’t have bins for production waste because they are not clothing producers. But in Brazil, we produce a lot of clothes, from the raw material to the fabric and finished product.”
Added Roviezzo: “We need to move up the sustainable agenda, to talk about it, and we need much more transparency. We can’t have two companies making cellulose and refuse to provide any data about it.”

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