Duty Free Retailing Market Analysis

The global Duty Free Retailing Market size will be valued at US$ 38.95 Billion in 2022. The market is expected to grow from US$ 42.3 Billion in 2023 to US$ 75.37 Billion in 2030, growing at a CAGR of 8.6% over the forecast period (2023-2030). Free retail in all regions was below expectations from pre-pandemic levels. According to our analysis, the global market in 2020 decreased by 42.38% compared to 2019.

This market generates significant revenue for the global aviation, travel and other travel-related industries. Airports typically generate nearly half of their total revenue from duty-free and travel retail. Sales of duty-free goods usually take place in international areas, especially seaports and airports. However, these goods may also be sold to transit buyers on board ships or aircraft.

Duty Free Retailing Market: Regional Insights

Among the regional markets, Asia Pacific emerged as the largest duty-free retail market in 2022 with the highest revenue share. Also, China, India, South Korea, and Japan supply most of the product demand in the Asia Pacific region. This is mainly due to an increase in disposable income associated with the growth of foreign tourism. Another important factor in the growth of the region is the growing number of foreign students, especially in emerging economies such as China and India.

The North America duty free retailing market is expected to witness the fastest growth at a CAGR during the forecast period. Various companies are collaborating with Responsibility Tree Stores for limited edition or exclusive products, driving the growth of the market.

Figure 1. Global Duty Free Retailing Market (%), By Region

Duty Free Retailing market: Growth drivers

• Rapid Expansion of the Tourism Industry to Encourage Market Expansion

The number of inbound and outgoing travelers is increasing significantly owing to the rise in the number of airports visitors globally. An increase in domestic as well as international business travels and, sports travel is a significant factor propelling the duty-free retailing market size. Summer Olympic Games, UEFA Euro, UEFA Champions League, and Premier Leagues are some of the major events that attract huge numbers of travelers across the globe. Every year, sport events are organized in various countries throughout the world, increasing the number of international tourists and visitors, which stimulates retail sales of luxury and branded items, notably through duty-free establishments. All the major European countries, as well as the Asia Pacific countries namely Malaysia, Singapore, Japan, and Thailand, attract a large number of visitors across the globe, thereby driving the duty-free retailing market sales.

Duty Free Retailing Market Report Coverage

Report Coverage	Details
Base Year:	2022	Market Size in 2022:	US$ 38.95 Bn
Historical Data for:	2017 to 2021	Forecast Period:	2023 to 2030
Forecast Period 2023 to 2030 CAGR:	8.6%	2030 Value Projection:	US$ 75.37 Bn
Geographies covered:	North America: U.S., Canada and Mexico South America: Brazil, Argentina and Rest of South America Europe: Germany, U.K., France, Italy, Russia, and Rest of Europe Asia Pacific:  China, India, Japan, Australia, South Korea, ASEAN, and Rest of Asia Pacific Middle East: GCC Countries and Rest of Middle East Africa: South Africa, North Africa, and Central Africa
Segments covered:	By Product Type: Fragrances & Cosmetics, Wines & Spirits, Fashion & Accessories, Tobacco, Watches & Jewelry, Confectionary & Fine Food, Electronics & Gifts, Others By Sales Channel: Airport Shops, Ferries, Airlines, Others By Region: North America, South America, Asia Pacific, Europe, Middle EastAfrica
Companies covered:	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
Growth Drivers:	Rapid Expansion of the Tourism Industry is Estimated to Boost the Market Expansion An Increase in Number of Duty-Free Retailing Stores with Technology Integration is Estimated to Boost the Market Growth
Restraints & Challenges:	Stringent Regulations on the Sale of Duty-Free Tobacco Products to Restrain the Market Growth

• An Increase in Number of Duty-Free Retailing Stores with Technology Integration to Boost Market Growth

There has been a rapid shift in consumer shopping behavior from offline to online stores due to the COVID-19 pandemic. Owing to the same, major vendors in the global duty-free retailing business, such as Dufry AG, Delhi Duty-Free, and Dubai Duty-Free, have built websites to give their clients a hassle-free shopping experience with various promotional codes and discounts that will help in attracting a large number of users. Also, technology integration has facilitated the tracking of human behavior both online and physically with advanced analytics and greater personalization. An increase in contactless shopping experiences with a major focus on zero-waste production and sustainable consumption practices in the e-commerce travel retail sector is anticipated to generate excellent opportunities in the market.

Duty Free Retailing Market: By segmentation

Figure 2. Global Duty Free Retailing Market (%), By Product Type

The Fragrance & cosmetics sub-segment has accounted for the highest revenue share in 2022 and it is estimated to show the fastest growth in the upcoming years. This is majorly owing to the growing demand for personal care products such as skincare, fragrances, and cosmetics. The duty-free retail stores at main airports contain a range of collections and brands under one roof, making it easy for shoppers to buy the items. Due to their strong customer-centric strategies, branded cosmetics and perfume enterprises attract a large client base. Retailers also provide huge discounts and special offers on branded perfume brands namely Estée Lauder, MAC, Chanel, and others. These factors are projected to boost the perfume and cosmetics sub-segment growth during the analysis timeframe.

The wine & spirits sub-segment is expected to grow at a significant pace during the analysis timeframe. Duty-free shops have become a popular destination for visitors who enjoy shopping wines & spirits. This is majorly owing to the cost-effectiveness offered by duty-free retail stores for purchasing wine & spirits. This is due to the elimination of import tax by government bodies. Duty-free retailing stores have some of the finest collections of liquors namely Glenlivet, Pepe Lopez, Smirnoff, Ballantine’s, Johnnie Walker, and others. Also, at some airports namely Mumbai Dutyfree, customers can pre-order duty-free products from a wide range of international and premium wine & spirits brands.

Duty Free Retailing Market: Market Restraints

• Stringent Regulations on the Sale of Duty-Free Tobacco Products to Restrain Market Growth

Several countries across the world have imposed stringent regulations on the sale of tobacco goods such as cigarettes at duty-free retailing stores in past years. This is majorly owing to an increase in the number of patients suffering from fatal diseases such as different types of cancers. Also, another factor affecting duty-free cigarette sales is the absence of popular overseas brands such as Benson & Hedges and Lambert and Butler at various stores.

Recent Developments:

• In October 2022, The Nescafe plan 2030: the company’s comprehensive plan to support more sustainable coffee cultivation, was unveiled by Nescafe, nestles most prominent coffee brand and one of the most popular coffees in the world. The company is speeding up its decade long efforts under the Nescafe plan by collaborating with coffee farmers to assist them in making the switch to regenerative agriculture.
• In February 2022, large scale adjustments must be made in how agricultural raw materials are produced and sourced to fulfill Nestles net zero roadmaps and transition to a regenerative food system. Nestle announced the establishment of the Nestle Institute of Agricultural sciences to integrate cutting edge agricultural research into practical applications and find the most promising agricultural innovations.
• In February 2021, Dufry-owned Hudson Group officially opened its first Hudson Nonstop store using Amazon’s Just Walk Out technology at Dallas Love Field Airport (DAL) on February 22, 2021. The Just Walk Out technology allows customers to pick up products in a physical store, pay for their items, and leave.
• In January 2021, DFS opened the first phase of a new downtown duty-free retail complex in Haikou Mission Mills, Hainan, China, on January 30, 2021, in partnership with Shenzhen Duty Free Group. DFS Group is to feature a luxury line-up across various categories at the first China International Consumer Products Expo to be held in Hainan on May 7-10, 2021. Co-sponsored by the Ministry of Commerce and the People’s Government of Hainan Province, the Consumer Expo is the first state-level exhibition to focus on consumer products.

Duty Free Retailing market: Key companies

Major players operating in the global duty free retailing market include, 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