The global duty free retailing market size is projected to be worth USD 112.75 billion by 2025. The duty free retailing market is majorly driven by increasing growth of travel and tourism industry coupled with rising penetration of low cost airlines. Increasing sales alcohol and confectionary is a major factor driving the growth of the global market.
Despite of witnessing a setback in 2016, it is projected that the duty free retailing industry will witness a robust growth in the foreseeable years with a CAGR of 6.5%. This is chiefly achievable due to the fact that the demand drivers of this industry are anticipated to stay sturdy. The achievement of the duty free retailing has a direct connection with several sectors mainly aviation, travel and retail.
Travel retail revenues make a functionally important influence to the overall financing of airports, the maritime companies as well as their infrastructure. All in all, these physiognomies of duty free retailing pose distinctive offerings for the travelers by meeting their needs, generating revenues and in turn supporting the maritime and aviation transport infrastructure and their services. Duty free retailing has emerged in parallel with the expansion of sea and air travel.
By type, the global duty free retailing market is subjugated by perfumes and cosmetics segment making up for a share of nearly 36% in 2018. Although, the use of perfumes and cosmetics has a long history, increasing demand for premium fragrances and cosmetic products has raised the growth of the global duty free retailing industry. Rising investments by the governments of several economies to set up duty free retailing centres to cater to international tourists is another key factor driving the global market. Perfumes and cosmetics as well as tobacco goods are expected to register the fastest growth over the forecast period owing to increased demand for international tobacco and cosmetic products. Travellers prefer tasting tobacco and other products of different countries and prefer purchasing them from duty free retailing shops. This is expected to drive the overall market growth.
Considering regions, Asia-Pacific dominated the market with nearly 42% in the global market in 2017 and is anticipated to maintain its dominance over the foreseeable years. This is mainly due to high population density especially in China and India. Although, Middle East & Africa is expected to exhibit the fastest growth in the global market owing to evolving features and facilities at duty free retailing shops and increasing number of safari travellers especially in the African countries. Furthermore, increasing interest of duty free retailing companies to set up their stores in India, China, Indonesia, Thailand, etc. is further driving the overall market growth. Rapid growth of European tourism industry, increasing number of international tourists as well as emergence of low cost airlines has enabled easy and cost efficient international travel. This is further projected to bring impetus in the global duty free retailing industry.
Duty Free Retailing Market Scope
|Forecast Unit||Value (USD)|
|Revenue forecast in 2025||USD 112.75 billion|
|Growth Rate||CAGR of 6.5% during 2021-2028|
|Segment Covered||Type, Distribution Channel, Regions|
|Regions Covered||North America, Europe, Asia Pacific, Latin America, Middle East & Africa|
|Key Players Profiled||Lagardère Travel Retail, Dufry, Lotte Duty-Free, Dubai Duty-Free, Aer Rianta International (ARI), James Richardson Corporation, China Duty-Free Group and LVMH among others.|
Key segments of the global duty free retailing market
Type Overview, 2015-2025 (USD Billion)
- Perfumes & Cosmetics
- Tobacco Goods
- Confectionary & Food
- Fashion & Accessories
- Watches & Jewellery
- Others (stationary, electronics, etc.)
Distribution Channel Overview, 2015-2025 (USD Billion)
- Onboard Aircrafts
- Train Stations
- Others (Downtown shops)
Regional Overview, 2015-2025 (USD Billion)
- North America
- Rest of Europe
- Asia Pacific
- Southeast Asia
- Rest of Asia Pacific
- Latin America
- Rest of Latin America
- Middle East & Africa
- South Africa
- Rest of MEA
Reasons for the study
- The purpose of the study is to give an exhaustive outlook of the global duty free retailing industry.
- With the arrival of new players in the global travel retail industry, the demand for duty free products has increased. Thus, the perfumes and cosmetics segment have been gaining huge importance and acts as a key segment in this market.
- Vigorous development of the travel and tourism industry in Asia-Pacific has been mainly driven by increased number of international students, international tourists as well as low cost airlines.
- However, throughout the research carried on the duty free retailing on regional and country level, we noticed that airports segment held a greater market share as compared to other distribution channels.
What does the report include?
- The study on the global duty free retailing includes qualitative factors such as drivers, restraints, and opportunities
- Additionally, the market has been evaluated using the value chain and PEST analysis
- The study covers qualitative and quantitative analysis of the market segmented on the basis of type, distribution channel and region. Moreover, the study provides similar information for the key geographies.
- Actual market sizes and forecasts have been provided for all the above-mentioned segments
- The study includes the profiles of key players in the market with a significant global and/or regional presence.
Who should buy this report?
This study is suitable for industry participants and stakeholders in the duty free and travel retail industry, who want an in-depth insight into the market.
The report will benefit:
- Executives of companies that are engaged in the supply of duty free products.
- Managers within financial institutions looking to publish recent and forecasted statistics pertaining to duty free retail industry.
- Venture capitalist looking into investing capital.
- Government organizations, regulatory authorities, policymakers and financial organizations looking for innovative solutions.
- Analysts, researchers, educators, strategy managers, and academic institutions looking for insights into the market to determine future strategies.
Travel and duty free retail is a sole retailing network of marketing especially to the international tourists and a considerable source of marketing opportunities and income for various economies, which need tailored regulatory and lawmaking solutions. The travel retail channel is completely distinct to the local market as it is chiefly an export channel for consumers travelling between different countries and regions across the globe. The goods and products sold in duty free retail outlets are not considered for consumption in the same country wherein they are purchased but are supposed to be carried by the consumer unopened to the final destination.
Robust growth of the global travel and tourism industry
The global tourism industry is considered to be one of the world’s largest industries accounting for an economic contribution of nearly USD 7.6 trillion as of 2014. The economic impact of this industry, including transportation, accommodation, attractions and entertainment was nearly USD 2.36 trillion the same year. Several countries such as the United States and France are prevalent tourism attractions, but some smaller countries are rapidly emerging to earn the economic benefits of the global tourism industry. The increase in number of travelers from developing countries is expected to accelerate the overall International travel.
Perfumes and cosmetics segment dominated the global duty free retailing market in 2017 with a share of nearly 36%. This is majorly due to increasing interest of travelers in procuring perfumes and cosmetic products of diverse brands under the same roof. Travelers tend to spend more on perfumes originated from different countries. Moreover, Asian travelers account for a major share in procuring perfumes and cosmetics from duty free retail shops due to lack of availability of international brands in several Asian countries. Additionally, low prices and availability of fresh stock is one key aspect driving the sales of perfumes and cosmetics. Although, tobacco goods are also expected to be a winner in the global duty free retail market due to increasing demand for international and foreign tobacco. Several smokers travel mainly to taste tobacco of different origins, thus driving the overall growth of this segment. Furthermore, increasing interest of consumers in opting for perfumes, cosmetics and tobacco goods for gift purpose is a major trend in the global market.
Considering distribution channel, airports dominated the global market owing to the presence of maximum number of travelers at airports. Airways being the fastest mode of travel, travelers prefer airports to be their duty free retail destination. Also, easy availability of duty free retail shops, support by airport authorities to maintain duty free shops as well as rising number of international travelers at airports are some key aspects driving the global market. However, others segment is expected to witness the fastest growth owing to increasing penetration of downtown duty free retailing shops. Several countries have now started the trend of opening duty free retail shops at several locations of the city to increase their customer base. This segment is projected to grow by nearly 6.5% over the forecast period.
Geographically, the duty free retailing market is expected to witness the fastest growth in Middle East & Africa. This is majorly due to increasing influx of tourists especially in Saudi Arabia and UAE. Increasing business and job opportunities in Turkey and South Africa is another key factor inviting travelers in huge masses, thus bolstering the overall duty free retailing market in the region. Moreover, increasing trade opportunities is further expected to drive the overall growth over the foreseeable years. Asia-Pacific dominated the global market due to increasing travel activities, rapid investments in setting up new and advanced duty free retail stores as well as increasing disposable incomes. South Korea, Indonesia and Thailand are expected to be the most lucrative markets over the forecast period. Also, increasing number of international students in India and China is one of the key factors driving the growth of the global duty free retailing market. Asia-Pacific accounted for nearly 43% in 2017 followed by Europe with 30% share. Furthermore, increasing number of tourists in Europe is one key aspect posing lucrative opportunities for the major duty free retail players across the globe.