This research report titled ‘Global Duty-Free Retailing Market 2015-2019’ provides an in-depth analysis of market growth in terms of revenue and emerging market trends. This market research report also includes up to date analysis and forecasts for various market segments and all leading regions.
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“The expansion of low-cost airlines in the aviation industry is attracting many travelers looking for low-cost tourism activities. Some of the popular low-cost airlines in the world are AirTran, EasyJet, German Wings, and Thai Air Asia. With many middle-class travelers taking off on inexpensive holidays, the trend has therefore helped the APAC and the Middle East emerge as the fastest growing regions for the duty free retailing market. Africa recorded close to 56 million travelers in 2014 and the growth of this market is also anticipated to fuel demand for duty free products at airports over the next four years,” said Vijay Sarathi, one of Technavio’s lead analysts for home and consumer retail research.
“Countries like Armenia, Oman, Qatar, India, Sri Lanka, China, Indonesia, South Korea, and Turkey emerged as some of the most desired inexpensive destinations in 2014. During the same period, it is estimated that international tourist inflow in APAC increased to almost 263 million travelers, and it has largely helped the market grow until 2019,” added Vijay.
Global duty-free retailing market by products 2014
Fashion accessories and hard luxury
Perfume and cosmetics
|Wines and spirits||16.02%|
|Confectionary & fine food||10.25%|
Source: Technavio research
Top three segments of the global duty free retailing market:
- Fashion, accessories, and hard luxury
- Perfumes and cosmetics
- Wine and spirits
Fashion, accessories, and hard luxury: largest segment of the global duty free retailing market
The fashion, accessories and hard luxury segment dominated the market with a share of over 32%. The market size of this product segment in the global duty-free retailing market was valued at close to USD 20.81 billion in 2014. The most in-demand products in this category include, precious jewelry, briefcases, handbags, and shoes. Some of the more popular brands preferred by consumers include, Michael Kors, Armani, Fossil, Gucci, and Burberry.
Technavio researchers observe, Chinese travelers have emerged as the largest consumers of luxury brands in 2015. It is estimated that, Chinese luxury shoppers contribute close to 25% of global revenue for luxury retail. Most Chinese shoppers opt to travel abroad and shop at duty-free shops because the average price of luxury brands in China is 50% higher than most developed countries. This trend will likely continue and further augment luxury product sales over the next four years.
Perfumes and cosmetics: second largest segment for the global duty free retailing market
The perfumes and cosmetics segment is one of the largest and the fastest growing categories in the global duty-free retailing market. In 2014, it had a share of around 29.21% out of the total duty-free retailing market. Increase in international travel, luxury foreign spending, and rising disposable income of middle-class travelers are some of this segment.
APAC and the Middle East are the key regions for this category. Some of the top selling brands in these regions include, Chanel, Christian Dior, Estee Lauder, and Guerlain. In 2013, L'Oréal, one of the biggest perfumes and cosmetics manufacturers, which had a revenue share of close to 21.5% in the perfumes and cosmetics duty-free category, created a division only for duty-free stores. The company described the division as the sixth continent. In 2014, L'Oréal launched some successful brands like Vichy and Kérastase in the duty-free retail segment in Asia and the US. In 2014, Estee Lauder also took concrete steps to expand its presence by offering a boutique that has all Estee Lauder luxury brands and high-touch services in emerging countries like UAE and in Detroit Metro Airport, US, a primary gateway to Asian countries. To tap the lucrative Asian, Estee Lauder has also launched a program called Three-Minute Beauty, which teaches travelers how to brighten the eye area. Similarly, many other vendors are likely to follow this trend and launch initiatives that engage with potential luxury product buyers at airports.
Wines and spirits segment of the global duty free retailing market
Duty-free shops help consumer in buying premium alcohol brands across spirits and wines by offering great deals and credibility of liquors. Johnnie Walker, Diageo's Scotch brand, continues to be the top-selling brand for the last couple of years, followed by Absolut, Jack Daniel's, Chivas Regal, and others.
The liquor category is expected to grow to USD 13.47 billion in 2019. Innovations in store layouts, well trained staff on liquors, and availability of limited edition offerings will largely support the growth of this market. Following this trend, in November 2014, Diageo launched Johnnie Walker Gold Label Reserve Exclusive Traveller’s Edition only in duty-free shops. In the same year in September, Diageo announced the opening of two Johnnie Walker House in duty-free shops in India and Taiwan. These developments largely drive the popularity of this segment and the trend is expected to continue over the next four years.
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