Duty-free and Travel Retail Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Market Is Segmented By Product Type (Beauty and Personal Care, Wines and Spirits, Tobacco, Eatables, Fashion Accessories and Hard Luxury, and Other Types), By Distribution Channel (Airports, Airlines, Ferries, and Other Distribution Channels), and By Geography (North America, South America, Europe, Asia-Pacific, and Middle-East and Africa).

Market Snapshot

Duty-free and Travel Retail Market Bar Graph
Study Period: 2017- 2026
Base Year: 2020
Fastest Growing Market: Asia Pacific
Largest Market: Asia Pacific
CAGR: >7.5 %
Duty-free and Travel Retail Market Major Players

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Market Overview

The duty-free and travel retail market is projected to register a CAGR of greater than 7.5% during the forecast period, 2021-2026, due to the growing demand for retail chains that offer luxury and premium brands of various products.

The duty-free and travel retail market was hit hard in 2020 due to the sudden fall in tourism amid the COVID-19 pandemic. The tourism sector has already felt the negative impact of the pandemic on its performance much earlier. Globally, travel restrictions and measures started as early as January 2020. Domestic and international tourists limited their travel due to fear of contracting COVID-19, which reduced the number of domestic and international customers for this retail channel.

Duty-free and travel retail is a retailing channel offering products to international travelers. It is a significant source of income and has several marketing opportunities. The rising popularity of the travel and tourism industry is one of the primary factors driving the growth of the duty-free and travel retail market. Duty-free and travel retail provides temporary spaces that offer extra time to end users after security check-in and allow them to get entertained and indulgent with the ambiance and experience of shopping for international products. The increasing focus on digitalizing the retailing process, so that the companies can maximize their profits, may boost sales in the market. The growing demand for retail chains that offer luxury and premium brands of various products is augmenting the growth of the duty-free and travel retail market. The distribution channels offer value to passengers, enhance their experiences while traveling, and add value to economic activities. The low customer interest in shopping at airports is expected to restrain the growth of the market at these stores, owing reasons, such as lack of promotion campaigns at these stores and high prices of products. Several companies are partnering with duty-free stores to launch their limited or exclusive products, which is driving the market growth. By product type, the wines and spirits segment is expected to gain a major share during the forecast period.

Scope of the Report

Duty-free shops (or stores) are retail outlets whose goods are exempt from the payment of certain local or national taxes and duties on the requirement that the goods sold will be sold to travelers who will take them out of the country. A complete background analysis of the market, including the analysis of market size and forecast, market shares, industry trends, growth drivers, and vendors, is provided. The study also includes insights into market segmentation, by type, distribution channel, and geography. Additionally, the report features qualitative and quantitative assessments by analyzing the data gathered from industry analysts and market participants across key points in the industry’s value chain. The market is segmented by product type (beauty and personal care, wines and spirits, tobacco, eatables, fashion accessories and hard luxury, and other types), distribution channel (airports, airlines, ferries, and other distribution channels), and geography (North America, South America, Europe, Asia-Pacific, and Middle-East and Africa). The report offers the market sizes and forecasts in value for the above segments.

By Product Type
Beauty and Personal Care
Wines and Spirits
Tobacco
Eatables
Fashion Accessories and Hard Luxury
Other Types
By Distribution Channel
Airports
Airlines
Ferries
Other Channels
Geography
North America
United States
Canada
Europe
Germany
United Kingdom
France
Rest of Europe
Asia-Pacific
India
China
Japan
Rest of Asia-Pacific
South America
Brazil
Mexico
Rest of South America
Middle-East and Africa
United Arab Emirates
Saudi Arabia
South Africa
Rest of Middle-East and Africa

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Key Market Trends

Duty-free and Travel Retail Sales Globally

Duty-free and travel retail comprises a category in a growing list of ancillary offerings by airlines. For some low-cost and ultra-low-cost carriers, the growth in the scope and magnitude of ancillary revenues has become key to their operations, allowing them to offer lower ticket prices and stimulate the overall demand for air travel as a result. Furthermore, when compared to airport duty-free and travel retail, the duty-free and travel retail sales generated by airlines are substantially smaller, both in magnitude and relative to the financial performance of the respective recipient.

In 2017, an estimated USD 36.2 billion was spent on duty-free and travel retail in the Asia-Pacific region. Airports and airlines accounted for nearly USD 21.2 billion in duty-free and travel retail sales, of which 75% occurred in the sub-region of East Asia. Duty-free and travel retail spending in the Asia-Pacific region accounted for an estimated 140,900 direct jobs and USD 7.6 billion in direct GDP.

Duty-free and Travel Retail Market Key Trends

Asia-Pacific is Anticipated to Dominate the Market

Asia-Pacific occupied more than one-third of the market share in 2017, and it is expected to grow at a significant rate during the forecast period. The increasing number of new air routes and the introduction of LCC carriers are among the main factors promoting the development of the Asia-Pacific duty-free and travel retail market. The rise in the consumption and purchasing power across China and India may have a positive impact on the market in this region.

In the region, the growing preference for differentiated and value-added products is boosting the people’s desire to travel, which in turn, is expected to increase the demand in the duty-free industry. The adoption of new lifestyles and the introduction of cheap destination travel packages by companies, such as MakeMyTrip, Cleartrip, and GoIbibo, may result in the growth of the global duty-free and travel retail market. Furthermore, the rapid penetration of social media and digitalization in the economy are expected to create lucrative opportunities for vendors operating in the Asia-Pacific market during the forecast period.

Duty-free and Travel Retail Market Growth Rate By Region

Competitive Landscape

The duty-free and travel retail market is highly fragmented, and the top players dominated the market with the majority share. The boom of the travel and tourism industry is encouraging the consumers to open new outlets and chains in the duty-free and travel retail market. The increasing focus on offering a diverse and wide range of products may enable the vendors to attract a large number of consumers and gain large market shares. The adoption of innovative promotional campaigns and attractive price offerings may help the players sustain the competition in the duty-free and travel retail market. Additionally, the procurement of super-premium and luxury products may help companies gain a competitive advantage over other vendors in the market during the forecast period. The report covers major international players operating in this sector. In terms of market share, few of the major players currently dominate the market.

Recent Developments

  • In February 2021, Dufry-owned Hudson Group officially opened its first Hudson Nonstop store using Amazon’s Just Walk Out technology at Dallas Love Field Airport (DAL) on February 22, 2021. The Just Walk Out technology allows customers to pick up products in a physical store, pay for their items, and leave.
  • In January 2021, DFS opened the first phase of a new downtown duty-free retail complex in Haikou Mission Mills, Hainan, on January 30, 2021, in partnership with Shenzhen Duty Free Group. DFS Group is to feature a luxury line-up across various categories at the first China International Consumer Products Expo to be held in Hainan on May 7-10, 2021. Co-sponsored by the Ministry of Commerce and the People’s Government of Hainan Province, the Consumer Expo is the first state-level exhibition to focus on consumer products.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 Value Chain/Supply Chain Analysis

    5. 4.5 Porter's Five Forces Analysis

      1. 4.5.1 Threat of New Entrants

      2. 4.5.2 Bargaining Power of Buyers/Consumers

      3. 4.5.3 Bargaining Power of Suppliers

      4. 4.5.4 Threat of Substitute Products

      5. 4.5.5 Intensity of Competitive Rivalry

    6. 4.6 Impact of COVID-19 on the Market

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Product Type

      1. 5.1.1 Beauty and Personal Care

      2. 5.1.2 Wines and Spirits

      3. 5.1.3 Tobacco

      4. 5.1.4 Eatables

      5. 5.1.5 Fashion Accessories and Hard Luxury

      6. 5.1.6 Other Types

    2. 5.2 By Distribution Channel

      1. 5.2.1 Airports

      2. 5.2.2 Airlines

      3. 5.2.3 Ferries

      4. 5.2.4 Other Channels

    3. 5.3 Geography

      1. 5.3.1 North America

        1. 5.3.1.1 United States

        2. 5.3.1.2 Canada

      2. 5.3.2 Europe

        1. 5.3.2.1 Germany

        2. 5.3.2.2 United Kingdom

        3. 5.3.2.3 France

        4. 5.3.2.4 Rest of Europe

      3. 5.3.3 Asia-Pacific

        1. 5.3.3.1 India

        2. 5.3.3.2 China

        3. 5.3.3.3 Japan

        4. 5.3.3.4 Rest of Asia-Pacific

      4. 5.3.4 South America

        1. 5.3.4.1 Brazil

        2. 5.3.4.2 Mexico

        3. 5.3.4.3 Rest of South America

      5. 5.3.5 Middle-East and Africa

        1. 5.3.5.1 United Arab Emirates

        2. 5.3.5.2 Saudi Arabia

        3. 5.3.5.3 South Africa

        4. 5.3.5.4 Rest of Middle-East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Company Profiles

      1. 6.1.1 Dufry

      2. 6.1.2 Lotte Duty Free

      3. 6.1.3 Lagardere Travel Retail

      4. 6.1.4 DFS Group

      5. 6.1.5 The Shilla Duty Free

      6. 6.1.6 Gebr. Heinemann

      7. 6.1.7 King Power International Group

      8. 6.1.8 China Duty Free Group

      9. 6.1.9 Ever Rich Duty Free

      10. 6.1.10 Dubai Duty Free

      11. 6.1.11 Duty Free Americas

      12. 6.1.12 Sinsegae Duty Free

      13. 6.1.13 Aer Rianta International

      14. 6.1.14 W H Smith

    2. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. DISCLAIMER

**Subject to Availability

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Frequently Asked Questions

The Global Duty-free and Travel Retail Market market is studied from 2017 - 2026.

The Global Duty-free and Travel Retail Market is growing at a CAGR of >7.5% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

Asia Pacific holds highest share in 2020.

Dufry, Lagardère Travel Retail, DFS Group, Lotte Duty Free, Flemingo International Ltd are the major companies operating in Global Duty-free and Travel Retail Market.

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