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The global travel retail market size was valued at USD 51.28 billion in 2021. The global market is projected to grow from USD 55.74 billion in 2022 to USD 96.11 billion by 2029, exhibiting a CAGR of 8.1% during the forecast period. The COVID-19 pandemic has been unprecedented and staggering, with tourism retailing products experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market had exhibited a decline of -42.50% in 2020 compared to 2019.
A growing number of millennial and middle-income traveler groups are offering immense opportunities to grow international retailing businesses. Nowadays, retail businesses keep food stations, bookshops, bars, and conference spaces decorated to maintain their shops attractive. Additionally, they maintain high-quality merchandising displays to capture travelers' attention towards buying their products. In November 2021, Bentley Leathers Inc., a Canada-based travel accessories manufacturer, launched a travel-focused retail store concept targeting airports and other travel platforms to offer a wide range of travel items, including travel bags, luggage etc. The store was initially opened in Montreal-Pierre Elliot Trudeau International Airport and aimed to expand in Canada and beyond.
Lockdown Restrictions to Threaten Market Prospects During Pandemic
To minimize coronavirus infection spread, governments worldwide are imposing lockdown and other travel restrictions. This factor has significantly lowered the number of air and marine travelers, threatening the overall travel & tourism industry. As per the data published by International Airport Transport Association (IATA), from 2009 to 2019, the global passenger traffic had fallen below the yearly rate of 5.5%.
Nowadays, passengers prefer wellness-related products to maintain their health during the pandemic. This factor will offer duty-free retailers newer opportunities to offer personalized products. Rising consumer demand for personal protection equipment (PPE) and products such as sanitizers, face masks, gloves, and others amid the pandemic will create newer avenues for duty-free retailers' business growth. Furthermore, the growing popularity of anxiety-reducing items among air passengers will accelerate the industry growth amid the COVID-19 pandemic. For instance, in 2020, Essence Corp, a Miami U.S.-based retail distributor for Bath & Body Works (BBW), reported a 41% jump in its retail sales from the bath and body works.
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Sustainable Duty-free Shopping Trend to Boost Market Development
Nowadays, travelers prefer buying sustainably made duty-free products to avoid the environmental impacts due to the usage of non-biodegradable items. This factor has pushed airport retailers to adopt sustainable business practices such as waste recycling & reduction, biodegradable packaging, and ethical raw material sourcing activities. This factor will create newer avenues for market growth. As per the recent study by the Tax-Free World Association (TFWA) in July 2020, 70 % of the 2,456 consumer participants worldwide were influenced by sustainability practices while purchasing a product during travel.
In addition to the factors mentioned earlier, retailers are implementing a customer-driven approach to sell their products and services online and increase their sales revenues. For instance, In July 2021, 3Sixty Digital Ltd. partnered with Virgin Atlantic Airways Ltd. to rollout Omneveo, an Omni-Channel retail platform that helps retailers uplift their customers' online shopping experience. Through such a digital shopping portal, passengers can better shop for products as per their requirements while doing in-flight and onboard activities.
Rising Number of International Travelers to Drive Market
The increasing number of domestic and international travelers will increase the product demand, driving the market growth. As per the report 'Indian Tourism and Hospitality Industry Analysis,' published by the Indian Brand Equity Foundation (IBEF), in 2019, there were 10.89 million foreign tourist arrivals in India, a 3.2% up over the previous year. Nowadays, retailers offer personalized loyalty programs & deal to meet changing shopping habits of air passengers. This factor helps retailers build their revenues from duty-free products, fueling the growth of the market.
Besides, rising millennial populations' spending on travel and tourism will upsurge the product revenues. Besides, rising millennial populations' spending on travel and tourism will upsurge the product revenues. For instance, as per the World Travel and Tourism Council (WTTC) data in November 2021, the French travel and tourism sector has surged by 34.9 % in 2021.
Continual Provision of Duty-free Campaigns by Retailers to Upsurge Product Demand
Nowadays, key companies launch promotional campaigns to encourage consumers to buy duty-free products. Additionally, they continuously offer high-quality, privately labeled products and services to delight higher-income airport travelers groups. These factors will support the airport retail shops' product revenues. For instance, in Nov 2021, Mumbai Duty-Free partnered with Flemingo and Adani Airport Holdings to unveil a fully digitalized flagship campaign, 'Mumbai Duty-Free is Now Free Campaign.' India. This campaign was re-launched to make use of a new digital approach of barcode scanning for vouchers and ensure customers with safe and contactless access to products.
High Product Pricing to Restrain Product Demand
The majority of the products sold by retailers are high-quality & branded. This factor enables retailers to sell travel goods at higher prices, thereby limiting the product demand among lower disposable income level traveler groups. Additionally, limited customer awareness regarding the new product launches and upgrades creates a barrier in purchasing commodities, restricting the market growth.
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Cosmetic & Fragrances Segment to Hold a Dominant Share of the Segment
The product segment is segregated into cosmetics, beverages, confectionery & fine foods, tobacco products, fashion & accessories, and others. The cosmetics segment holds a major market share due to the growing interest of females and millennials in internationally acclaimed brands that are difficult to find in their native locations. Also, the tax-free pricing of perfumes and high fashioned apparel can be purchased as a gifting accessory without import prices, surging the segment's growth.
The retailers showcase multiple collections and brands under one roof, making travelers easy to purchase. The branded cosmetics and fragrances companies appeal to a broader consumer base with their customer-friendly business policies. Also, retailers offer customer-friendly policies for all kinds of products merchandised in their shops.
In the case of wines & spirits, the industry has an estimated progressive growth as travelers passionate about international liquor brands can taste and purchase luxurious duty-free liquor brands from wine retailers to kill the waiting time in airports. Nowadays, international liquor brands such as 'Macallan (The Macallan Global Boutiques), Dalmore (Dalmore Store), and internationally renowned brands mainly focus on selling their products through airport shops and cruises lines to increase travelers' accessibility. Such a factor is further supporting the product revenues from the beverages segment.
Fashion & accessories are likely to achieve substantial growth during the forecast timeline, as fashion products are notably popular among celebrities and sportspersons. Fashion retailers focus on specializing in the niche marketing approach to attract an array of customers with similarities in purchasing behavior related to sports kits, musical equipment, and beauty cosmetics.
The growing popularity of innovative e-cigarettes of different sizes and shapes will increase consumer demand for such products at airports and cruises, driving segmental revenues for tobacco products. However, airlines and maritime stores' smoking-related prohibitory rules will limit the tobacco product demand among travelers, thereby declining the tobacco products' segmental growth.
Confectionery & fine food products are among the fastest-selling categories of food products that have gained widespread transactions among youngsters and millennials. The bright and attractive displays of cartons characters are a great way to cater to customers at the door. The stickers and fun displays with customizable wall arts create lucrative demand for youngsters. Chocolates and other confectionery retailers try to raise their presentation and create innovative ways through fictional characters to enlighten the mindsets of youngsters, bringing new growth opportunities for the segment.
The others segment includes watches, jewelry, fine arts, electronic items, and gift items, which are also expected to witness noticeable demand during the forecast period. These items are purchased by travelers through unique online applications to earn rewards and points, which raises the customers' thirst to acquire more products from such deals.
Duty-Free Segment to Hold a Leading Position
Global travel retail market share is bifurcated into duty-free and duty-paid in terms of sector. The duty-free segment holds a major share due to its value-added tax benefits over its counterpart. Nowadays, cosmetic companies such as L'Oréal, Estee Lauder Inc., and others increasingly focus on selling their products through duty-free shops to enhance their sales channel. Such a factor will fuel the duty-free segmental growth. Additionally, the rising number of international travelers and their demand for duty-free products will accelerate the segmental revenues. As per the data presented by the Centre for Asia-Pacific Aviation (CAPA), in 2021, the total gross duty-free spending at Indian airports will reach USD 1.6 billion by 2021.
The duty paid sector is also likely to witness growth in demand as the duty-paid retailers are taking multi-channel strategies and customer-driven solutions to sell their products. The retailers are focused on catering to a wider consumer base by launching apps to gather online information to create a curated shopping experience based on specific interests. Through expansions and tie-ups with domestic airports, selling high-quality and high-priced products will allow the retailers to upgrade their services and establish a competitive edge in the global industry.
Rising Number of Airport & Airline Shops to Augment Market Growth
The airport & airline shops' segment holds a major share owing to the continual airport retailers' provision of customer-centric cosmetic and beverage products. This factor results in significant revenue generation from the airport segment. Furthermore, the in-flight Wi-Fi experience offers a seamless online shopping experience to the air passengers, thereby surging the segmental revenues. According to the International Civil Aviation organization data, the number of departures internationally rose by 1.7 % from 2018 and reached 38.3 million in 2019.
Recently, worldwide train transportation services witnessed a considerable surge in passenger bookings. This factor will increase the train passengers' demand for such products, thereby resulting in others' segments generating considerable product revenues. As per the statistics from Indian Railways, there is an increase of 113% in earnings from passenger segments during the second quarter of 2021 compared to the first quarter. Thus, greater passenger bookings through train services provide potential growth opportunities for train retail services to boost passenger traffic.
The border downtown hotel shops are gaining neutral demand as these shops create revenue for small businesses to sustain in a competitive environment and create jobs for the locals. These retailers don't charge high taxes, and customers can access various products.
The seaports & cruise line ships have steadily witnessed footfall in retail and duty-free outlets and are anticipated to grow considerably during the 2022-2029 period. The growing number of workers involved in shipping cargo through the marine routes has boosted the demand among seaport retailers. Also, the surging number of travelers following the sea routes is estimated to create opportunities for cruise line shops. As per the data from Cruise Lines International (CLIA), 28 million people traveled through the ships and cruises in 2018 and will likely cross the 30 million mark in 2019.
Asia Pacific Travel Retail Market Size, 2021 (USD Million)
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The worldwide tourism retail sector is segregated into the North American, European, Asia Pacific, South American, and Middle East & African regions.
Asia Pacific region's market was valued at USD 25.95 billion in 2021. A significant number of domestic and international travelers spend on duty-free products in China, India, and South Korea, resulting in the Asia Pacific region dominating the global industry in duty-free retail. The adoption of cheap travel tours by companies in the Asia Pacific region, including MakeMyTrip, Yatra, and others, has facilitated the customer traffic rates in booking, generating new growth opportunities for the travel operators to expand their businesses.
Nowadays, duty-free retailers establish partnerships with Asian domestic and international airports to expand their businesses in Asia. This factor will further increase the Asia Pacific region's market growth rate. For instance, in May 2019, King Power International Group signed an agreement with Suvarnabhumi Airport (Bangkok Airport) to increase its duty-free retailing business in Thailand.
The European market will grow considerably due to growing travel & tourism-related infrastructural settings such as hotels & restaurants, amusement parks, etc. As per the estimated data published by the CBI Ministry of Foreign Affairs, the total European tourism comprising air, land, and sea travel out of Europe accounted for 496 million trips in 2019. Also, the region's tourism and travel trips generated 35 % of the international tourism expenditure in a similar period. Additionally, the robust presence of luxury goods brands such as 'Dufry AG, Aer Rianta International, and Lagardere Group result in considerable product revenues in the region.
Increasing U.S. and Canadian spending on travel & tourism is mainly supporting the North American retail industry's growth. According to the statistical data presented by U.S. Travel Organisation, in 2019, U.S. domestic and international travelers' spending reached USD 1,127 billion. Also, the increase in the purchasing capacity of individuals has boosted regional growth.
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Saudi Arabia and UAE's rising middle-income population groups mainly support the Middle East & African retail sector. Nowadays, Brazilians prefer buying high-quality apparel and cosmetic goods at domestic duty-paid shops. Such a factor will provide an increase in the product demand among Brazilians. Furthermore, the growing number of airport retailers in Brazil and Chile will increase the number of air passengers, driving regional growth.
Business Expansion through E-commerce is Key Strategy Fueling the Industry
Nowadays, prominent key players such as Dufry AG, Shilla duty-free shop, and others focus on capturing consumer buying behavior and offering personalized retailing goods to the customers to gain a competitive edge globally. Additionally, they continuously introduce sales promotional offers to attract buyers towards their products. For instance, in September 2020, Malaysia Airports Holdings Berhad introduced an e-commerce platform, 'shopMYaiports,' to facilitate revenue amid the disruptions caused due to the pandemic. The e-commerce platform also offers free delivery with a minimum order amount of USD 71.65 to elevate the digital purchase experience.
An Infographic Representation of Travel Retail Market
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The global market research report analyzes the market in-depth and highlights crucial aspects such as prominent companies, product types, sectors, sales channels, and regional areas. Besides this, the travel retail market analysis and insights into the latest trends and highlights significant industry developments. In addition to the aspects mentioned above, the report encompasses several factors contributing to the industry's growth over recent years.
Value (USD Billion)
By Product Type
By Sales Channel
North America (By Product Type, Sector, Sales Channel, and Country)
Europe (By Product Type, Sector, Sales Channel, and Country)
Asia Pacific (By Product Type, Sector, Sales Channel, and Country)
South America (By Product Type, Sector, Sales Channel, and Country)
The Middle East and Africa (By Product Type, Sector, Sales Channel, and Country)
Fortune Business Insights says that the industry size was USD 55.74 billion in 2022 and is anticipated to reach USD 96.11 billion by 2029.
In 2021, the industry valued at USD 51.28 billion.
At a CAGR of 8.1%, the global travel retail market forecasted to grow from 2022 to 2029.
The cosmetics segment is a leading product type during the forecast period (2022-2029).
The rising number of international travelers is accelerating growth.
Lagardere Travel Retail (Lagardere Group), DFS Group Ltd., Dufry AG are leading companies worldwide.
Asia Pacific region to dominate the market in 2021.
Retailers adopting eco-friendly business practices is one of the prominent trends.
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