Duty Free Retailing Market to 2027 - Global Analysis and Forecasts by Product Type (Cosmetics and Personal Care Products, Alcohol, Wine and Spirits, Tobacco and Cigarettes, Fashion, Confectionery and Food Stuff, Other); Application (Airports, On-board Aircraft, Seaports, Others)
Publication Month: Feb 2020 | Report Code: TIPRE00008786 | No. of Pages: 191 | Category: Technology, Media and Telecommunications | Status: Published
The duty free retailing market accounted for US$ 77.87 Bn in 2018 and is anticipated to grow at a CAGR of 8.44% to reach US$ 155.30 Bn by 2027.
Constant development in the travel & tourism industry, coupled with the integration of several segments including hospitality & infrastructure with government initiatives, enhance the travel & tourism industry, resulting in the growth of the duty-free retailing market. According to the World Travel and Tourism Council (WTTC), the global travel & tourism sector is witnessing a significant growth with a surpassing global GDP in 2018 for the eighth year consecutively. The industry grew at 3.9% YoY and accounted for US$ 8.8 Trillion in 2018.
The high growth in the travel & tourism industry is attributed to the rising middle-class population worldwide coupled with low-budget travel packages offered by several travel package providers.
The growth in the travel & tourism industry is also resulting in the construction of new airports and ports worldwide. For instance, in 2020, GMR Airports Ltd signed a contract to build duty-free shops at Kannur international airport in Kerala, India. Also, several airport expansion projects are underway in North America and the European region. Moreover, several developing nations are investing in building new airports to handle the increasing passenger traffic. The capacity within terminals enables specific brand outlets to create their individual retail space, and for larger duty-free shops to build branded spaces within a larger store, supporting higher-value sales. Furthermore, several cruise lines are also opening duty-free stores. For instance, in 2018, Carnival Cruise Line, an international cruise line, and Heinemann introduced a duty-free shopping experience for its customers’ onboard Carnival Liberty. Also, Heinemann’s APAC arm also announced the opening of its duty-free store onboard vessel Carnival Spirit based in Sydney. According to Cruise Lines International Association (CLIA), the number of cruise tourists increased globally from 17.8 Mn passengers in 2009 to an anticipated 30 Mn in 2019. The association also expects that the cruise industry will witness further growth owing to the expansion of new destinations. The growth in the construction of new airports, as well as the cruise industry, is anticipated to drive the overall growth of the travel & tourism industry, thus boosting the duty-free retailing market
Lucrative Regions for Duty Free Retailing Market
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Market Insights
Moving Trend from Desktop to Mobile, Voice, and Bots
The notable trend is being witnessed among customers moving from a traditional desktop system to mobile, voice, and Chabot’s. The retail sector is witnessing a rise in mobile e-commerce, due to which there is rapid adoption of simple and enhanced processes which makes product selection, booking, and payment instantaneous.
With the advancement in technology, voice assistants are getting better at understanding the human voice. Besides voice, digital travel assistance such as Chabot’s are significantly enhancing customer’s experience. Introduction of AI in technologies are anticipating traveler’s needs in real-time. With the implementation of advanced technologies and application based shopping, the duty-free retailing is expected to witness significant demand during the forecast period.
Product Type Market Insights
Based on product type, the duty-free retailing market is segmented into cosmetics and personal care; alcohol, wine and spirits; tobacco and cigarettes; fashion and accessories; confectionery and food stuff; and others. The others segment consists of electronics, health supplements, toys, watches, books, and fine writings. The opportunity to purchase the products at a much lesser cost is catalyzing the trend, which is impacting positively on the growth of the duty-free retailing market. Additionally, airlines always lookout for impressive services to enhance passenger flying experience, and onboard shopping and pre-boarding shopping is one of the new services rolled out by airlines, which is, in turn, driving the growth of the duty free retailing market.
Duty Free Retailing Market, by Product – 2018 and 2027
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Application Market Insight
Based on Application, the duty-free retailing market is segmented into Airports, Onboard Aircraft, Seaports, and Others. Airports segment holds the largest market share, followed by others, seaport, and on-board segment. The airport duty-free retailing facility offers a pre-booking of duty-free products, which allows the customers to choose the product delivery at the airport or on-board. This facility allows passengers to carry less luggage, which further reduces the risk of incurring excess baggage fees.
Strategic Insights
The players operating in the enterprise content management market focus on strategies such as mergers, acquisitions, and market initiatives to maintain their positions in the market. A few developments by key players are listed below:
- In July 2020, Dubai Duty Free opened a new Arrivals Shop in Terminal 3 of Dubai International Airport. The new Dubai Duty Free Arrivals Shop structures a total retail space of 1,100sqm, which is an important increase over its previous retail area of 660sqm. The additional area is mainly in front of the demise line of the old shop, and the new shop is designed to expressively improve the visibility of the shop to arriving passengers within the large baggage hall.
- In November 2019, Bacardi Global Travel Retail joined with Dubai Duty Free during the launch of Aberfeldy 19YO Exceptional Cas. Available from 1 November 2019 at 13 Dubai Duty Free stores across Dubai International Airport, ABERFELDY 19YO Exceptional Cask Small Batch is presented in special edition packaging, consisting bottle numbering that celebrates its newly at Dubai International and offers an thrilling proposition for single malt connoisseurs and collectors as well as tempting new generations of adult whisky drinkers..
Global Duty Free Retailing Market Segments:
Duty Free Retailing Market – By Product Type
- Cosmetics and Personal Care Products
- Alcohol, Wine and Spirits
- Tobacco and Cigarettes
- Fashion
- Confectionery and Food Stuff
- Others
Global Duty Free Retailing Market – By Application
- Airports
- On-board Aircraft
- Seaports
- Others
Duty Free Retailing Market – By Geography
North America
- U.S.
- Canada
- Mexico
Europe
- France
- Germany
- Italy
- Spain
- UK
- Rest of Europe
Asia Pacific (APAC)
- Australia
- China
- India
- Japan
- Rest of APAC
Middle East & Africa (MEA)
- Saudi Arabia
- UAE
- South Africa
- Rest of MEA
South America (SAM)
- Brazil
- Rest of SAM
Companies
- Aer Rianta International (ARI)
- China Duty Free Group Co.,Ltd.
- Dubai Duty Free
- Duty Free Americas
- Gebr. Heinemann
- King Power International Group
- Lotte Duty Free
- Shinsegae Duty Free
- The Shilla Duty Free
- LVMH
- LAGARDèRE TRAVEL RETAIL
- Hyundai Duty Free
- DUFRY AG
Frequently Asked Questions
Other factors contributing to the market growth include growing number of new air routes, introduction of LCC carriers, and rise in the consumption and purchasing power in China and India. Further, the introduction of cheap destination travel packages by companies such as Cleartrip, MakeMyTrip, and GoIbibo is anticipated to drive the growth of the global duty-free and travel retail market.
Intending to allow passengers to purchase cosmetics and personal care products from international brands at a discounted price, the airlines are increasingly offering passengers to surf and buy these products during ticket booking. Also, passengers can purchase a variety of cosmetics and personal care products on-board, which is another ancillary revenue generation stream.
With the advancement in technology, voice assistants are getting better at understanding the human voice. Besides voice, digital travel assistance such as Chabot’s are significantly enhancing customer’s experience. Introduction of AI in technologies are anticipating traveler’s needs in real-time. With the implementation of advanced technologies and application based shopping, the duty-free retailing is expected to witness significant demand during the forecast period.
The List of Companies - Global Duty Free Retailing Market
- Aer Rianta International (ARI)
- China Duty Free Group Co.,Ltd.
- Dubai Duty Free
- Duty Free Americas
- Gebr. Heinemann
- King Power International Group
- Lotte Duty Free
- Shinsegae Duty Free
- The Shilla Duty Free
- LVMH
- LAGARDèRE TRAVEL RETAIL
- Hyundai Duty Free
- DUFRY AG
- Highlights key business priorities in order to assist companies to realign their business strategies.
- The key findings and recommendations highlight crucial progressive industry trends in the duty free retailing market, thereby allowing players to develop effective long term strategies.
- Develop/modify business expansion plans by using substantial growth offering developed and emerging markets.
- Scrutinize in-depth global market trends and outlook coupled with the factors driving the market, as well as those hindering it.
- Enhance the decision-making process by understanding the strategies that underpin commercial interest with respect to product type and application.
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