Global Duty Free Retailing Market – Insights
Duty free retailing is purchasing of products at shops present at airports, cruise, and ferries where no tax is levied on the purchased products. To avoid fees/taxes at international borders, customers tend to make purchases at duty free stores. Various products including perfumes, cosmetics & personal care products, food & beverages, electronic items, and fashion & accessories are made available at these stores.
Fragrances & cosmetics segment is expected to show a significant growth in global duty free retailing market over the forecast period (2019-2027). Fragrances & cosmetic segment includes duty free perfumes, scents, and beauty, & personal care products. Companies are focusing on starting multi-brand cosmetics stores to offer a wide range of products to tourists. For instance, in March 2019, China Duty Free Group (CDFG) announced to open an exclusive perfumes and cosmetics multi-brand store in the new extension of Citygate Outlets in Tung Chung.
Airport sales channel segment held significant market share in global duty free retailing market in 2018. Duty free shops are major revenue sources for airports. Key players in the market are focused on investing in airport shops, which in turn supports growth of the segment. For instance, in February 2019, Duty Free America (DFA) announced its plans to begin an ambitious program of store investment at Miami International Airport that will run throughout 2019.
North America held a significant market share in the global duty free retailing market in 2018, owing to an increasing number of flights and subsequent growth in footfall at airports present in the region. According to the Airports Council International-North America (ACI-NA), in 2017, North American airports observed a 5.8% increase in international passenger traffic as compared to 2016.
However, security checks, airline’s gate allocation, and boarding procedures limit the amount of time a customer can spend on shopping at airports. Furthermore, cabin baggage restrictions imposed by many of the air carriers are expected to restrain the market growth.
The global duty free retailing market was valued at US$ 67.74 billion in 2018 and is anticipated to exhibit a CAGR of 8.6% in terms of revenue, over the forecast period (2019 – 2027), to reach US$ 136.28 billion by 2027.
Figure 1. Global Duty Free Retailing Market Share (%), By Region, 2018
Source: Coherent Market Insights, 2018-19
Asia Pacific held the largest market share in the global duty free retailing market in 2018 and is expected to be dominant in the forecast period, owing to introduction of convenient shops and increasing passenger traffic in the region. According to Airports Council International, Beijing Airport surpassed 100 million passengers in 2018, at a growing rate of 5.4% from 2017.
Furthermore, various key players are focused towards enhancing their product portfolio, For instance, in 2015, Dufry AG acquired 50.1% stake in World Duty Free S.p.A, an Italy-based multinational travel retailer. The acquisition is expected to help Dufry AG to expand its product portfolio and further increase its global presence
Figure 2. Global Duty Free Retailing Market Share (%), By Product Type, 2018
Source: Coherent Market Insights, 2017-18
Players operating in the global duty free retailing market are adopting various growth strategies to attract consumer base. For instance, in 2018, AirAsia launched its inflight e-commerce website, ‘OURSHOP’, in partnership with Plaza Bali Duty & Tax Free. Through ‘OURSHOP’, customers can explore a wide range of products and will have multiple delivery options from airport, onboard, downtown to home delivery.
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 2018, 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.
Table of Contents
* Browse 24 market data tables* and 12 figures* on "Duty Free Retailing Market” - Global forecast to 2027.
Coherent Market Insights followsa comprehensive research methodology focused on providing the most precise market analysis. The company leverages a data triangulation model which helps company to gauge the market dynamics and provide accurate estimates. Key components of the research methodologies followed for all our market reports include:
In addition to this, Coherent Market Insights has access to a wide range of the regional and global reputed paid data bases, which helps the company to figure out the regional and global market trends and dynamics. The company analyses the industry from the 360 Degree Perspective i.e. from the Supply Side and Demand Side which enables us to provide granular details of the entire ecosystem for each study. Finally, a Top-Down approach and Bottom-Up approach is followed to arrive at ultimate research findings.
Coherent Market Insights desk research is based on a principle set of research techniques:
Coherent Market Insights has a large amount of in-house repository of industry database. This is leveraged as a burner for initiating a new research study. Key secondary sources include:
Preliminary Data Mining
The raw data is obtained through the secondary findings, in house repositories, and trade surveys. It is then filtered to ensure that the relevant information including industry dynamics, trends, and outlook is retained for further research process.
Holistic approach is used to ensure that the granular and uncommon parameters are taken into consideration to ensure accurate results. The information from the paid databases are further combined to the raw data in order to standardize it.
Coherent Statistical model
We arrive at our final research findings through simulation models. Coherent Data Analytics Model is a statistical tool that helps company to forecast market estimates. Few of the parameters considered as a part of the statistical model include:
Once the findings are derived from the statistical model, large volume of data is process to confirm accurate research results. Data analytics and processing tools are adopted to process large chunk of collected informative data. In case, a client customizes the study during the process, the research finding till then are benchmarked, and the process for new research requirement is initiated again.
This is the most crucial stage of the research process. Primary Interviews are conducted to validate the data and analysis. This helps in achieving the following purposes:
The primary research is conducted with the ecosystem players including, but not limited to:
Finding it difficult to find the research that would cater to your business demands? Give us a chance to help you. One of our Research Consultants will connect to provide a customized solution.
Talk to our research consultant to design an exclusive report as per your research needs.
We aim to fulfil client's research demands with tailored research solutions.
We aim to provide research studies in quickest turnaround time and in a much cost effective manner.
We cover each industry from supply and demand side with an aim to provide a most holistic research study.
We strive to provide most accurate and reliable research findings in our research reports.