The global airport retailing market size was valued at $27,552.8 million in 2019, and is expected grow at a CAGR of 12.6% during 2021–2027 to reach 40,592.8 million in 2027. Airport travel retail comprises a considerable market share in the travel retail industry. The airport retail stores are commonly found at departures, arrivals, and airside. The growth of the airport travel market is largely driven by rise in air traffic, expansion of airport infrastructure, and high customer demands for luxurious products.
Airports follow the general travel retail shop concept as retail hubs on airports carries a variety of items and includes full range of product categories, such as wines & spirits, perfumes & cosmetics, tobacco goods, electronics, and food & beverage, fashion & accessories. These retail shops at airports are located in central areas with high passenger flow, which attracts more customers. The duty-free products in retail stores refer to the products available at airport and are exempted from payment of national taxes, duties, and other certain local taxes. The duty-free products such as liquors, tobacco, perfumes, fashion, and electronics are purchased by travelers travelling from one country to another. The rules and regulations on airport retailing industry differ in each country. For instance, some countries have enforced stringent government regulations on the purchase of duty-free liquor, whereas India once allowed passenger to purchase two to three liters of alcohol from airport duty-free shops, which was reduced in January 2020.
The key drivers of the global airport retailing trend include inclination of people toward unique and exotic holiday experiences, increase in the middle- & upper-class disposable income & related expenditure, and rise in need and interest of people to spend more money on shopping. Moreover changes in lifestyle, rise in tourism promotion, increase in accessibility of transport facilities contribute toward the growth of the airport retailing market.
As per recent statistics, Asia-Pacific millionaires now control more wealth than their peers in North America. In terms of future spending options, travel has been recognized as the top priority with greater focus on unique luxury experiences and adventure activities. These factors increase the number of travelers, which directly impacts the sales at airport retail shops, thereby augmenting the growth of the airport retailing market.
By Product Type
Perfumes and Cosmetics segment dominates the global market and is expected to retain its dominance throughout the forecast period.
The global airport retailing market is segmented into product type, airport size, distribution channel, and region. Depending on product type, the market is categorized into liquor & tobacco, perfumes & cosmetics, fashion & accessories, food & beverages, and others. Airport retailing market by airport size segment is classified into large airport, medium airport, and small airport. On the basis of distribution channel, it is fragmented into direct retailer, convenience store, specialty retailer, and departmental store. Region wise, it is studied across North America, Europe, Asia-Pacific, and LAMEA.
The key players profiled in airport retailing market report are Airport Retail Group LLC, Dubai Duty Free, Dufry AG, DFS Group Ltd., King Power International, the Shilla Duty Free, China Duty Free Group Co., Ltd., Gebr. Heinemann SE & Co. KG, Japan Airport Terminal Co., Ltd., and Flemingo International. Partnership and agreement are the key growth strategies adopted by established players such as DFS Group, Dubai Duty Free, and Flemingo International to gain maximum airport retail revenue.
By Airport Size
Medium airport segment is expected to grow at a highest CAGR of 13.5% during the forecast period.
COVID-19 impact and analysis for airport retailing market
The outbreak of coronavirus has significantly impacted not only the tourism industry but also airport retail stores. The airport retailing market is one of such market, which is currently facing challenges due to the outbreak, which was declared a pandemic by the WHO on March 11, 2020. The airport retail stores are anticipated to experience the differential impact of this rapidly spreading COVID-19 on each stage of its value chain through the mediums of the affected workforce, trade & logistics, demand–supply volatility, and uncertain consumer demand at retail outlets.
Trade restrictions imposed by several countries across the globe to prevent further spread of coronavirus has significantly affected global logistics and transportation of liquor, which, in turn, has impacted the growth of the airport retailing market. The outbreak of coronavirus has led to shutdown of economic activities in the country for few months. Moreover, the outbreak of COVID-19 has disrupted the economy by halting the operations of retail & service activities. International travel has grounded to a standstill along with tourism-related activities. The negative economic impact of this global lockdown still remains unclear.
By Distribution Channel
Direct Retailer segment is expected to grow at a highest CAGR of 13.8% during the forecast period.
Since the outbreak, international travel and other flight services have been shut down due to pandemic and the implementation of lockdown. Owing to the this global health crisis, international travel has slowed down, which has significantly affected airport’s duty-free sales. Many international flights have been cancelled during the lockdown period, which is expected to hamper the growth of the airport retailing market.
Moreover, it is observed that this has led to weaker demand for airport duty-free products from airport retail stores such as liquors, tobacco, fashion goods, electronics, and cosmetics. However, due to decrease in the number of COVID-19 cases, the travel and tourism sector has started to recover gradually since the last quarter of 2020, which has helped the recovery of airport retailing market, although it is expected that the market will recover to its 2019 value in 2023.
Asia-Pacific dominates the market in 2019 and is expected to grow with a CAGR of 13.7% during the forecast period
Key Benefits For Stakeholders
- The study provides an in-depth analysis of the global airport retailing market growth with current trends and future estimations to elucidate the imminent investment pockets.
- The report provides a quantitative analysis of the airport retailing market share from 2019 to 2027 to identify the prevailing airport retailing market opportunities.
- The report provides a quantitative analysis from 2019 to 2027, which is expected to enable the stakeholders to capitalize on prevailing airport retailing market trends.
- In-depth analysis and the airport retailing market size and segmentation assist to determine the prevailing opportunities.
- Competitive intelligence in airport retailing market analysis highlights the business practices followed by leading players across various regions.
Airport Retailing Market Report Highlights
By Product Type
By AIRPORT SIZE
By DISTRIBUTION CHANNEL
Key Market Players
FLEMINGO INTERNATIONAL, JAPAN AIRPORT TERMINAL CO., LTD., KING POWER INTERNATIONAL, GEBR. HEINEMANN SE & CO. KG, AIRPORT RETAIL GROUP, LLC, THE SHILLA DUTY FREE, DUFRY AG, CHINA DUTY FREE GROUP CO., LTD., DFS GROUP LTD., DUBAI DUTY FREE
The global airport retailing market is anticipated to witness robust growth in regions such as Asia-Pacific and LAMEA. The growth in the number of HNI(High Net Worth Individuals)s global population and easy availability of on-arrival visa propel the growth of the overall airport retailing market.
Increase has been witnessed in the number domestic flights in Europe, LAMEA, and Asia-Pacific owing to rise in interest of people in travelling through airlines and increased spending ability. According to industry experts, French, Germans, Spaniards, and Australians opt for perfumes and cosmetic categories. In addition, Russian travelers and Asian travelers opt for electronics and fashion products. Liquor category is preferred by all the travelers around the world. .
Countries such as China and India have huge growth potential and are the major investment pockets in the airport retailing market. Affluent Arabs prefer to spend their holidays in the most luxurious way such as visiting London and splurging on high-end shopping. In addition, they opt for destinations, where they can spend huge amount on shopping. Affluent Chinese millennial travelers prefer to have quality travel experience; thus, they opt for high-end accommodation and luxurious ways of traveling and shopping luxury products through airport retail shops, thereby propelling the growth of the overall airport retailing market. Key market players are adopting various growth strategies such as partnerships and agreement to sustain in the competitive market.