Airports become flagships: Beauty brands trade discounts for immersion

For nearly two years, travel retail weighed heavily on results at Estée Lauder, L’Oréal, Shiseido, and others, particularly in Asia where daigou disruptors (personal shoppers who buy luxury goods and resell them) and an uneven tourism recovery pushed the channel into volatility. Now, the market is stabilizing. Passenger volumes are rising across Asia and Europe, cosmetic and fragrance counters are seeing renewed footfall, and the consumer profile passing through airports is younger, digitally fluent, and driven less by bargain-hunting and more by experience. Estée Lauder Companies is acting early in this reset. The group has appointed Lina Ly as Travel Retail Asia-Pacific’s senior vice president, signaling a shift in strategy. Ly brings more than two decades of experience across Lancôme Travel Retail APAC, L’Oréal Luxe Hong Kong, Chanel Beauty China, and most recently L’Occitane Group Asia-Pacific, where she guided digital transformation and sustainability. Her mandate is clear: To rebuild Estée Lauder Companies’ travel retail value proposition through storytelling, exclusivity, and traveler-centric service, rather than discounting. This strategic recalibration coincides with improving fundamentals. The global travel retail market surpassed $95 billion in 2024 and is projected to reach $153 billion by 2030, with beauty accounting for roughly one-third of total sales. Beauty travel retail alone is expected to expand from $31.5 billion in 2024 to $49 billion by 2033, backed by rising skincare demand and high-frequency purchasing behavior among Gen Z and millennial travelers. Travel retail’s value equation moves from price to experience The most significant transformation is happening in consumer psychology. “Consumers are shifting from price sensitivity towards experience, instant gratification, and personalization,” says Moqian Sun, founder of marketing and consulting strategy firm The Harvest, with a focus in travel retail and customer in-store experience. “Gen Z wants shareable, photo-worthy, unique moments. They make spontaneous decisions triggered by what they see on-site: an AR lipstick try-on, a sensory perfume story, a skincare diagnosis with visible results. They are not motivated by duty-free stickers alone.” This shift reshapes store formats, staffing, product mix, and even the logic of airport retail processes. Where once duty-free aimed to accelerate conversion before boarding, today the goal is to extend dwell time, heighten discovery, and deepen memory. Beauty counters are evolving into service studios. Lancôme’s Absolue Longevity Travel Clinics promise treatment-like interventions; Kérastase’s K-scan AI offers real-time scalp assessments; and Aesop’s Three Rooms uses scent, texture, and narrative to create immersive vignettes. The terminal experience has become an experiential journey, not a transaction point. For Estée Lauder, Ly’s leadership signals a renewed push to anchor brand equity in Asia-Pacific. APAC accounts for more than 50% of global travel retail sales, and no market is more influential today than Hainan, where the December 2025 shift to island-wide customs clearance and near zero-tariff frameworks is expected to accelerate product launches, and the development of local inventory hubs and travel-exclusive distribution strategies. Ly will oversee how hero franchises, such as Advanced Night Repair, are reintroduced through experiential retail formats tuned to APAC consumer patterns. How luxury beauty brands are making travel retail a cinematic playground As travel retail shifts from transactional counters to staged environments, brands are reimagining the airport as a site of spectacle, identity performance, and immersive brand storytelling. Shiseido Travel Retail’s Nars ‘Around the Globe’ month-long animation transformed the CDF Sanya International Duty Free Shopping Complex into an immersive travel lounge. A bold spherical control tower installation became the visual anchor, drawing travelers into a space that blended retro-aeronautical nostalgia with editorial vibrancy. Within the activation, travelers navigated AR try-on mirrors, interactive look styling, and an AI-powered ‘Navigator ID’ Photo booth that printed personalized travel-themed cards designed to be kept, displayed, and photographed. The campaign included roving ambassadors in flight-inspired uniforms guiding guests through the experience, linking theatricality with convenient product trials. Where Nars used nostalgia and visual theater, Givenchy Beauty leveraged participation and celebrity. Its viral “One-Day Store Manager” activation in Hainan invited shoppers to meet and shop directly with Thai-German actor Patrick Yi, who introduced the “Le Rouge Velvet Matte” collection through personal storytelling and guided shade exploration. The experience filled all sessions within hours, drawing heavy foot traffic, and tripled sales versus the previous day. More importantly, it catalyzed 8.7 million impressions on social platforms, with more than 500 pieces of user-generated content pushing the activation far beyond Sanya. The traveler was no longer a passive visitor, but part of the interactive brand narrative. This model — participation multiplied through social circulation — has become central to luxury beauty’s travel retail revival. The product is no longer simply the lipstick. The product is the moment of being seen choosing the lipstick. Hainan rewrites the global launch calendar “As Hainan transitions to island-wide zero-tariff (retail), global travel retail will reorganize around Asia,” says Sun. Supply chains, marketing calendars, launch allocations, and exclusive formats are already shifting. Brands are building inventory hubs and experiential flagship counters in Sanya and Haikou not only to serve travelers on-site, but to seed domestic demand that blooms upon return. Meanwhile, the boundary between travel retail and domestic channels is dissolving. Engagement at the airport is now expected to continue on Tmall, WeChat Mini Programs, or a brand boutique. The next phase is a single, coordinated consumption ecosystem, with pricing alignment, shared customer IDs, and replenishment paths that follow the traveler home. Sun suggests that this requires new operational discipline. “Real-time inventory visibility across borders, thoughtful SKU segmentation to avoid price cannibalization, and loyalty platforms that convert impulse discovery into repeat purchase,” she says. The most advanced operators are already building these pipes in APAC. Travelers’ motivation has shifted from status to self “Before travel retail equaled duty-free savings,” says Yilin Wang, founder of Yilin Consulting, which helps brands create authentic connections with Chinese travellers across EMEA. “Now, it is a destination experience. Emotional resonance has overtaken price advantage.” She says that average spend per passenger in major European hubs remains below 2019 levels, even as traffic surpasses pre-pandemic figures. The implication: travelers are reallocating spend toward experiences, dining, and memory-making over physical goods. Purchase motivations have shifted from gifting and status to self-reward and meaning. Limited travel editions, niche scents, collectible packaging, and ritual-based skincare services offer travelers something transferable: a story to keep, share, and relive. In a digital environment where Xiaohongshu (also known as RedNote) posts are social currency — the strongest value is not monetary, it is narrative. Technology will play a key enabling role, but Wang cautions against assuming technology alone is the answer. “AI can recommend the perfect serum or custom scent,” she says. “But the moment of human connection — the story, the sensory explanation, the conversation — is irreplaceable. In a digital world, travel retail may become the last place where genuine physical connection still feels meaningful.” Global retail competition intensifies Hainan’s new regulatory structure will not only accelerate international brands, it will enable Chinese beauty brands to scale. For instance, in 2024, Florasis opened an independent brand store in the CDFG Sanya International Duty-Free Shopping Complex (Block C) Global Beauty Plaza. With faster product development cycles and sharper cultural fluency, domestic players are poised to compete directly in duty-free zones, where international brands once faced little local competition. To remain aspirational, global brands will need to emphasize scarcity, artistry, personalization, and local storytelling — components that align well with the experiential shift already underway. The new formula for travel retail is to stop treating airports as purely transactional spaces. They are condensed cultural arenas where travelers are emotionally open, time-sensitive, and actively constructing identity. The brands that win will approach the terminal not as an outlet, but as their most charged and theatrical flagship.

How APAC’s Gen Z is forcing beauty brands to rethink duty-free

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How APAC’s Gen Z is forcing beauty brands to rethink duty-free