Duty-Free Retailing Market Research, 2031
The global duty-free retailing market was valued at $33.7 billion in 2021, and is projected to reach $94.2 billion by 2031, growing at a CAGR of 10.6% from 2022 to 2031. Duty-free retailing is the process of selling goods to passengers at airports, on cruises and ferries, and at downtown duty-free shops and land border crossings, etc. without charging them with any taxes or excise levies. International travelers have access to a range of products such as alcohol, fragrances and cosmetics, fashion and accessories, food and confectionery, tobacco, jewelry, and watches. These products can be bought at a lot cheaper price from these shops as compared to a regular store as duties are not applied. The continued growth and development of the duty-free retailing market support transport modes through the financial contribution it makes, and global tourism by further incentivizing international travel by sea, air, and land. These factors are anticipated to boost the duty-free retailing market size during forecast period.
Growth in disposable incomes around the world coupled with increased consumer spending, and expanding international tourism industry, especially in the Asia-Pacific region is anticipated to propel the duty-free retailing market opportunities during the forecast period. Duty-free shoppers in the Asia-Pacific region increasingly use digital platforms to facilitate their purchases. This is typically using mobile applications such as Alipay, Paytm, etc. India is one of the greatest growth opportunities for the global duty-free retailing market. The growing population, augmenting air connectivity, inbound tourism, and the propensity to travel internationally by India’s middle class are all driving the market growth in India.
Limited product offerings, disadvantageous exchange rates, and currency fluctuations are some of the major restraining factors that may hamper the duty-free retailing market growth during the forecast period. Currency fluctuations have a substantial effect on the consumer buying decisions. A weak currency increases the cost of imported products and ultimately, this cost is borne by the customer. A stable currency lets consumers buy more. Additionally, certain regulations around tax exemptions and travel limitations for visitors crossing land borders create caps on shopper flows.
Downtown duty-free retailing is anticipated to offer ample growth opportunities to market players. Downtown retail locations provide opportunities to improve sales volumes facilitated by an airport pick-up of goods bought at the end of visitors’ trips. Sales are also boosted through an increased product range offered to customers due to the removal of physical restrictions that limit most airport-based duty-free operations. Additionally, downtown duty-free stores can offer operators greater flexibility in store size and configuration, and leasing options.
The industry players are investing a lot of effort on the R&D of smart and unique strategies to sustain their growth in the market. These strategies include product launches, mergers & acquisitions, collaborations, promotions, partnerships, and refurbishing of existing technology. For instance, in September 2022, A Slovak national won $1 million in the Dubai Duty-Free Millennium Millionaire draw held at Concourse B of Dubai International Airport.
The key players profiled in this report include Duty-Free Americas, SHINSEGAE DUTY-FREE, Aer Rianta International, Dubai Duty-Free, China Duty-Free Group Co., Ltd., LOTTE HOTEL., DUFRY AG, HYUNDAI DEPARTMENT STORE DUTY-FREE, Lagardère group, and LVMH.
The global duty-free retailing market segmentation is provided based on product type, sales channel, and region. By product type, the market is sub-segmented perfume & cosmetics, electronics, wine & spirits, food, confectionery & catering, tobacco, luxury goods and others. By Sales Channel, the market is classified into airport, cruise liners, railway stations, border and down-town & hotel shop. By region, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The duty-free retailing market is segmented into Product Type and Sales Channel.
By product type, the perfume & cosmetics sub-segment dominated the market in 2021. The customers can find best value in duty-free shopping at airports usually in the cosmetics and fragrance products. Internationally renowned brands offer luxury cosmetics and perfumes in these duty-free retail stores. These reputed cosmetics and perfume brands include Calvin Klein, Gucci, Dolce & Gabbana, Davidoff, Trex, Burberry, Prada, L’Oréal, Coty, Dior, etc. Customers can purchase duty-free perfumes and cosmetics on the duty-free website and collect their order at the duty-free retail shop on the day of their flight.
By sales channel, the airports sub-segment dominated the global duty-free retailing market share in 2021 owing to the rising number of duty-free retail stores at various airports around the world. Airport financial performance is majorly dependent on aeronautical fees related to air transportation services carried out at the airports, and non-aeronautical or commercial revenues from other business activities such as duty-free retailing conducted at or by the airport. Duty-free retailing operations are central to an airport’s strategy to build non-aeronautical revenue streams. Airport duty-free retailing facilities allow pre-ordering of duty-free goods, letting customers choose whether they want their purchases delivered at the airport or on board.
By region, Asia-Pacific duty-free retailing market share was highest in 2021 and is projected to remain the fastest-growing sub-segment during the forecast period. The developing travel and tourist industry, and the increasing number of new international routes are the primary drivers of the duty-free retailing business in the Asia-Pacific region. The duty-free retailing business highly contributes to the economic development of countries in the Asia Pacific region through the employment and activity it generates. In Addition, the growing importance of e-commerce in the Asia Pacific region is further fueling the duty-free retailing market demand in this region. Duty-free retail operators have developed apps designed to attract and entice customers to buy products by offering discounts and various incentives.
Impact of COVID-19 on the Global Duty-Free Retailing Industry
- During the COVID-19 outbreak, every aspect of economic and social activity was disrupted, and many aspects still are disrupted. Along with the human tragedy, the pandemic has also resulted in severe damage to the global economy, trade, and mobility
- The air transport ecosystem and the airport sector are among the major sectors most affected by the COVID-19 health crisis, due to the industry’s global nature
- The sudden decline in air traffic across the globe impeded the aeronautical and commercial revenues of airline operators. Thus, negatively impacting the duty-free retailing market
Key Benefits For Stakeholders
- The report provides an exclusive and comprehensive analysis of the global duty-free retailing market trends along with the duty-free market forecast
- The report elucidates the duty-free retailing market opportunity along with key drivers, and restraints of the market. It is a compilation of detailed information, inputs from industry participants and industry experts across the value chain, and quantitative and qualitative assessment by industry analysts
- Porter’s five forces analysis helps analyse the potential of the buyers & suppliers and the competitive scenario of the market for strategy building
- The report entailing the duty-free retailing market analysis maps the qualitative sway of various industry factors on market segments as well as geographies
- The data in this report aims on market dynamics, trends, and developments affecting the duty-free retailing market forecast
Duty-Free Retailing Market Report Highlights
| Aspects | Details |
 Market Size By 2031 | USD 94.2 billion |
 Growth Rate | CAGR of 10.6% |
 Forecast period | 2021 - 2031 |
 Report Pages | 310 |
 By Product Type |
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 By Sales Channel |
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 By Region |
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 Key Market Players | The Shilla Duty Free, DFS Group, China Duty Free Group Co.,Ltd., Gebr. Heinemann SE & Co. KG, KING POWER International, Dufry AG, Dubai Duty Free, Lotte Duty Free, Lagardère Travel Retail, Duty Free Americas |
Analyst Review
The massive growth in the duty-free retailing market is majorly attributed to growth in disposable income worldwide, rising developments in the travel & tourism sector, increasing presence of downtown shops, and the growing importance of e-commerce. Duty-free shopping allows passengers to buy products without having to pay any taxes. Travelers have access to a wide range of products including alcohol, fragrances, cosmetics, food and confectionery, tobacco, jewelry, and watches. Duty-free operators in the Asia-Pacific region are increasingly focusing on downtown retail locations to accommodate the growing demand for duty-free throughout the region.
Among the analyzed regions, Asia-Pacific is expected to account for the highest revenue in the market by the end of 2031, followed by, Europe, North America, and LAMEA. Rapid industrialization and urbanization are the key factors responsible for leading position of Europe and Asia-Pacific in the global duty-free retailing market.
Growing business opportunities, rocketing passenger rates, and changes in the air travel industry are the upcoming trends in the duty-free retailing market.
The duty-free retailing market has leading applications in perfume & cosmetics, wine & spirits, electronics, luxury goods.
Asia-Pacific is the largest regional market for the duty-free retailing market.
The duty-free retailing industry is estimated to reach $93,991.9 USD.
The top companies to hold a major share in the duty-free retailing market include China Duty Free Group Co Ltd (CDFG), Lotte Duty Free, The Shilla Duty Free, and Dufry Group.
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