DFS Group, the travel retail subsidiary of luxury conglomerate LVMH, announced plans on Tuesday to construct a significant shopping and entertainment complex on China's tax-free Hainan island. This move is aimed at capitalizing on a growing tourism market that has remained robust despite economic slowdowns.
The company described this venture as "an unprecedented investment" in the 128,000-square-meter project, which is expected to open by 2026. The complex will house over 1,000 luxury brands, including those from LVMH Moet Hennessy Louis Vuitton. DFS anticipates that the complex will attract 16 million visitors annually by 2030, offering accommodation, dining, and entertainment facilities.
This development marks DFS's first physical presence in mainland China. Currently, the company operates 12 stores in Hong Kong and Macau. "This project is part of a series of commitments we are making in China," said DFS China president Nancy Liu.
However, a post-pandemic economic slowdown and a declining youth jobs market have unsettled the country and dented some consumers' confidence. Despite these challenges, LVMH's expansion demonstrates long-term optimism for China's luxury market. Yet it also faces an economy that only recently started showing signs of recovery and sparked a sell-off in European luxury stocks due to weakening demand.
"The new complex is the clearest commitment we can make to the long-term development of China's tourism market," said DFS chairman and CEO Benjamin Vuchot. He added that Hainan is set to become one of the world's largest luxury retail markets in the next five years.
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