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The Duty-free Retailing Market size is forecast to increase by USD 33.93 billion at a CAGR of 11.28% between 2023 and 2028.
Several factors play a crucial role in the market's growth, such as the growing international tourism, the growing number of retail stores offering duty-free products, and the exemption of excise duty on premium products. The report provides market size, historical data spanning from 2018 - 2022, and future projections, all presented in terms of value in USD billion for each of the mentioned segments.
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Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Exemption of excise duty on premium products is notably driving the market growth. The Duty-Free Retailing market primarily thrives on the sales of a variety of premium products, especially luxury brands in fashion goods, accessories, hard luxury items, cosmetics, fragrances, and wines and spirits. In 2021, fashion apparel and accessories, along with cosmetics and perfumes, constituted about 40% of the total revenue in the global duty-free retailing market. Key international players like Dufry AG, Lotte Corp., and Lagardere SA are strategically expanding their product portfolio by introducing a broader range of luxury brands to cater to the increasing demand.
The exemption of excise and customs duty on duty-free products at airports, cruise lines, and international borders results in significantly lower prices, making these luxury items more affordable. This pricing strategy attracts a broader customer base, including price-sensitive customers, contributing to increased demand and enhanced Return on Investment (ROI). Moreover, the duty-free retail market is anticipated to witness further expansion, especially in international airports, as shopping behavior among tourists is expected to carry a preference for luxury items. The chains operating in duty-free retailing are likely to benefit from airport construction and expansion projects across various countries, fostering growth in the sales channel. Hence, such factors are driving the market growth during the forecast period.
A growing focus on enhancing the shopping experience of travelers is an emerging trend in the market. The global duty-free retailing market is experiencing a significant high fuelled by a growing emphasis on improving the shopping experience for travelers. In addition, duty-free retailers are increasingly investing in innovative strategies to elevate the overall shopping journey, catering to the preferences and expectations of modern travelers.
Moreover, one key trend is the adoption of cutting-edge technology and digital solutions to offer seamless and personalized shopping experiences. In addition, from mobile apps enabling pre-ordering options to interactive displays providing product information, these digital innovations are revolutionizing the way travelers engage with duty-free outlets. Furthermore, there is a noticeable shift toward creating aesthetically pleasing and experiential store environments that captivate travelers and encourage exploration. In addition, duty-free retailers are leveraging creative store designs, captivating displays, and immersive sensory experiences to create memorable shopping moments. Hence, such factors are driving the market growth during the forecast period.
Restriction on baggage weight on flights is a major challenge hindering the market growth. The amount of luggage that passengers can carry on the flight is restricted by limitations and allowances by airlines all around the globe. In addition, this restriction on luggage weight on flights discourages passengers from purchasing more duty-free items. Furthermore, travelers are less likely to buy beer, food, or leather goods because these items add to their luggage's weight.
For instance, the traveler of economy class in Lufthansa Airlines can carry hand baggage of 17.64 pounds and check-in baggage of up to 50.71 pounds. Moreover, these restrictions hinder and discourage the sales opportunity for products such as alcohol as they are relatively heavier than the other product groups. Furthermore, the airlines impose extra luggage charges on duty-free products, which discourages shoppers from purchasing duty-free products at airports. Hence, such factors are hindering the market growth growth during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Aer Rianta International: The company offers duty free retailing solutions for cosmetics, liquor, tobacco, fashion, and confectionery through joint venture partnerships, airport partnerships, and brand partnerships.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 23 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The cosmetics and perfumes segment is estimated to witness significant growth during the forecast period. The cosmetics and perfume segment is one of the main top three largest revenue generation segments of the global duty-free retailing market. In addition, the growing number of international travelers, increasing expenses and adoption of luxury shopping during travel, rising disposable income of middle-class travelers, and rapid urbanization are all attributable to the significant market share of cosmetics and perfumes in the duty-free-retailing market.
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The cosmetics and perfumes segment was the largest segment and was valued at USD 16.57 billion in 2018. Moreover, travelers in the APAC and Middle East region were the main contributors to the high sales growth of this segment. In addition, some of the top-selling cosmetic and perfume brands names include L'Oreal, Chanel, Christian Dior, Estee Lauder, and Guerlain. In addition, several companies operating in the global duty-free retailing market are expanding their market presence by opening retail stores and launching exclusive product lines for duty-free retail across the world. Thus, all these factors will play a crucial role in driving the growth of the cosmetics and perfumes segment of the global duty-free retailing market during the forecast period.
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APAC is estimated to contribute 43% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The market in APAC has been fuelled by sales from the airport distribution channel segment and was followed by the border, downtown, and hotel shops. In addition, some of the popular international airports in APAC with duty-free retail operations include Hong Kong International Airport, Jakarta Soekarno-Hatta International Airport, Bali Ngurah Rai International Airport, Medan Kualanamu International Airport, Singapore Changi Airport, Naha Airport, Saipan International Airport, and Chhatrapati Shivaji International Airport. Some popular cruise centers in this region include Singapore Cruise Centre, Tanah Merah, Singapore Cruise Centre, and HarbourFront. Moreover, the growing travel and tourism sector and the increasing number of new international connections are significantly driving the market for duty-free retailing in APAC. In addition, rising levels of urbanization and the emergence of low-cost carrier (LCC) flights are driving duty-free goods in the region. Furthermore, the introduction and growth of duty-free stores in international airports and seaports are also driving the growth of the market. Hence, such factors are driving the market growth in APAC during the forecast period.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
The market is intricately tied to the realms of aviation and travel-related industries. Recognized by organizations such as the Airports Council International (ACI), this market has been a focal point in discussions at events like the Global Aviation Summit. Governments, as seen in the case of India's Civil Aviation Ministry and the ambitious Dholera project, are actively participating in fostering this market's growth. With the airport expansion in various airport countries, these retailing chains include free alcohol with carry luxury and chains carry items. The dynamics of duty-free and travel retail are evolving, as indicated by the presence of luxury and premium brands in retail chains, involvement in major sports events like the UEFA Champions League, UEFA Euro, and Summer Olympics, and a burgeoning e-commerce travel retail sector. Fashion accessories, cosmetics from renowned brands like MAC and Armani, and the wines and spirits segment are key players in this vibrant market, creating a unique shopping experience for global travelers.
The market is a dynamic landscape, with significant players like Shenzhen Duty Free and Dubai Duty Free making substantial contributions. At airports like Shanghai Pudong International Airport and through initiatives such as Delhi DutyFree, this market has become a global phenomenon. With the airport expansion in various airport countries, these retailing chains include free alcohol with carry luxury and chains carry items The involvement of reputed organizations like the United Nations Children's Fund (UNICEF) reflects a commitment to social responsibility within the duty-free and travel retail market. Major sporting events, including the UEFA Summer Olympics, serve as platforms for the industry's prominence. As reported by Global Times, the market's growth is fueled by diverse offerings and strategies, positioning it as a key player in the global retail sector. With a continuous influx of international travelers seeking diverse products, the duty-free retailing market remains a crucial component of the global travel and tourism industry.
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Duty-free Retailing Market Scope |
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Report Coverage |
Details |
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Page number |
172 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 11.28% |
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Market Growth 2024-2028 |
USD 33.93 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
13.77 |
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Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
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Performing market contribution |
APAC at 43% |
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Key countries |
US, China, Japan, Germany, and France |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
3Sixty Duty Free, Aer Rianta International, Avolta AG, China international travel service co. LTD., Delhi Duty Free Services Pvt. Ltd., DFS Group Ltd., Dubai Duty Free, Duty Free Americas Inc., Duty Free Philippines Corp., Ever Rich Duty Free Shop, Flemingo International, Gebr. Heinemann SE and Co. KG, Hyundai Department Store Group Co. Ltd., James Richardson Group, Lagardere SA, Lotte Corp., Mumbai Duty Free, SHINSEGAE INTERNATIONAL, The Shilla Duty free, Changi Airport Group Singapore Pte. Ltd., Japan Airport Terminal Co. Ltd., King Power Group, and Qatar Airways |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Distribution Channel
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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