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
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.
|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|
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
|Restraints & Challenges:||
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
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.
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
Duty free retail shops have helped airports to generate greater revenues all over the world and thereby reduced the landing fees the airports charge to airlines. In turn, it has helped airlines to keep lower ticket prices that has benefited travelers of the airlines. Revenue generated by the airport retail stores can also be utilized for infrastructure development as airports need continuous up-gradation. For instance, according to Airports Council International-North America, America’s airports would require more than US$ 128 billion in infrastructure upgrades by 2023.
By product type, duty free wines & spirits segment is expected to gain major traction, and this is owing to increasing sales of wines & spirits in duty free stores as government bodies do not impose any tax on alcoholic products bought from duty free shops. Moreover, companies are launching new liquor products at duty free shops to attract more tourists. For instance, from April 2019, a Poland-made spirit, Pravda Vodka, has been made available at Aer Rianta International’s ‘The Loop Duty Free New Zealand’, at Auckland Airport.
Among regions, Europe held a significant market share in 2022, owing to increasing number of travelers in the region. For instance, according to the Airports Council International, in 2018, Heathrow Airport (London), Charles de Gaulle Airport (Paris), Amsterdam Airport Schiphol (The Netherlands), and Frankfurt Airport (Germany) were ranked among the world’s top 15 busiest airports by passenger traffic.
Key features of the study:
“*” marked represents similar segmentation in other categories in the respective section.
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