Global Duty-Free Retailing Market 2017-2021

January 04, 2017
This market research study identifies Dufry, Lagardère, Lotte Shopping, and LVMH as some of the leading vendors in the global duty-free retailing market. A comprehensive analysis of this market is also presented by product category, distribution channel, and geography.

Overview of the duty-free retailing market 

Technavio’s market research analysts predict that the global duty-free retailing market will witness impressive growth and will post a CAGR of more than 8% over the forecast period. Duty-free retailing is mostly concentrated on the sales of luxury brands of fashion goods, accessories, hard luxury items, cosmetics, fragrances, wines, and spirits. However, luxury items, fashion goods, and accessories account for the majority of revenue generated in the global duty-free retailing market. It has been observed that premium categories play a pivotal role in determining sales in the duty-free retailing space, which has led international retailers like DFS from LVMH and Dufry to predominantly introduce luxury brands to their product portfolio to boost sales. Moreover, the exemption of excise or custom duties at airports, cruise lines, and international borders further lower the prices of these otherwise expensive premium products. With premium products becoming affordable to the price-sensitive consumer segment, the market for duty-free retailing is expected to have a positive outlook in the coming years.

In terms of geography, the APAC region dominated the global duty-free retailing market and is expected to lead the market during the predicted period. South Korea, China, Hong Kong, Singapore, and Thailand are some of the key countries that drive the sales and growth of the duty-free market in the region. The growth of duty-free retailing in the region is attributed to the increasing number of Chinese outbound tourists, who contributed nearly 30% of the global duty-free retailing market's revenue in 2016. Additionally, a consistent increase in the middle-class population in the region is also one of the major factors contributing to this market’s growth in APAC.

Competitive landscape and key vendors

Although the global duty-free retailing market is relatively mature in developed countries, there is ample oppurtunity for duty-free retailers to explore the potential markets in APAC. The high adoption of premium products through duty-free retailing will aid in the market's growth in the said countries, which have predominantly price-sensitive consumers. Most international players are focusing on better branding and positioning of products, and creating and enhancing customer shopping experience and engagement.

 Key vendors in this market are -

  • Dufry
  • Lagardère
  • Lotte Shopping
  • LVMH

Other prominent vendors are Aer Rianta International (ARI), China Duty Free Group, Dubai Duty Free, Duty Free Americas, Gebr. Heinemann, JR/Group (James Richardson), King Power International Group, and The Shilla Duty Free.

Segmentation by product category and analysis of the duty-free retailing market

  • Fashion, accessories, and hard luxury
  • Cosmetics and perfumes
  • Wines and spirits
  • Tobacco
  • Confectionery and fine foods

During 2016, the fashion, accessories, and hard luxury segment dominated the market and is likely to highest revenue contributing segment during the forecast period. Some of the key products in this category include precious jewelry, briefcases, handbags, and shoes. The increasing disposable income and growing influence of the fashion industry on the consumers’ purchase decision is fuelling this segment’s growth.

Segmentation by distribution channel and analysis of the duty-free retailing market

  • Airports
  • Cruise liners, ferries, and seaports
  • Border, downtown, and hotel shops
  • Rail stations and others

Airports were the highest revenue generating distribution channels during 2016 and will continue to dominate the market over the next four years. Most airports are increasingly focusing on generating more revenue from non-aeronautical sources as aviation charges are no longer the nucleus. Therefore, airports are giving more spaces for the development of duty-free outlets, for instance, in 2014, Shanghai Pudong International Airport increased its Sunrise Duty-Free retail space by 50% to increase the sales turnover.

 Key questions answered in the report include

  • What will the market size and the growth rate be in 2021?
  • What are the key factors driving the global duty-free retailing market?
  • What are the key market trends impacting the growth of the global duty-free retailing market?
  • What are the challenges to market growth?
  • Who are the key vendors in the global duty-free retailing market?
  • What are the market opportunities and threats faced by the vendors in the global duty-free retailing market?
  • What are the trending factors influencing the market shares of the Americas, APAC, Europe and MEA?
  • What are the key outcomes of the five forces analysis of the global duty-free retailing market?

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