The global duty free retailing market is an important channel for travel retail sales. Duty free shops offer a unique shopping experience to international travelers by allowing them to purchase goods free of all domestic taxes and duties. They offer a wide range of products including perfumes, cosmetics, wine & spirits, tobacco, fashion & accessories, and confectionery. The global duty-free retailing Market is estimated to be valued at US$ 38.95 Billion in 2023 and is expected to exhibit a CAGR of 8.6% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Growing international passenger traffic has emerged as a key trend fueling the growth of the duty free retailing market. The international Air passenger traffic has grown significantly over the years with increasing globalization and rising incomes. According to the International Air Transport Association (IATA), the global air passenger traffic increased by around 6.5% year-on-year in 2019. The strong growth in international passenger traffic results in more travelers passing through airports on a daily basis. This provides a captive customer base for duty free shops located within airport premises, thereby driving the demand for duty-free products.
SWOT Analysis
- Strength: Duty free retailing provides tax savings to customers, which attracts more customers. It also offers unique and attractive products which cannot be found elsewhere.
- Weakness: Duty free retailing heavily relies on international travel/tourism which is highly vulnerable to external factors such as economic conditions, pandemic outbreaks etc.
- Opportunity: Growing international travel and tourism worldwide due to increasing discretionary income and globalization presents lucrative opportunities. Emerging economies are anticipated to drive future growth in travel retail industry.
- Threats: Technological advancements enable online shopping without travel which poses threats. Stringent regulations and visa policies can negatively impact travel retail market.
Key Takeaways
The global duty free retailing market is expected to witness high growth in the forecast period of 2023 to 2030.
Asia Pacific region currently dominates the global duty free retailing market with highest market share. China, Singapore, Hong Kong, South Korea are among the largest duty free retailing markets in the Asia Pacific region. Robust economic growth, rising middle class, increasing disposable incomes and globalization of travel in Asia Pacific countries are fueling the growth of duty free retailing industry in this region.
Key players operating in the duty free retailing market are Dufry AG, LOTTE Duty Free Company, DFS Group Limited, Gebr. Heinemann SE & Co. KG, The Shilla Duty Free, The King Power International Group, James Richardson Corporation Pty Ltd., Duty Free Americas, Inc., Flemingo International Ltd., Dubai Duty Free, and China Duty Free Group Co., Ltd. These players are focusing on expanding their retail networks globally as well as diversifying their product portfolios to cater to the needs of a wide customer base. They are also adopting omnichannel strategies and enhancing digital capabilities to engage customers and boost sales.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
