The Asia-Pacific airport retail market has been forecasted to grow 75 per cent by 2015, making it the number one region in the world.
Growth in the airport retail market is driven predominantly by soaring passenger volumes, which are increasing rapidly in emerging markets, rather than an increase in average spend per passenger, according to Companies & Markets.
Asia-Pacific’s duty free and airport retailing market outperformed Europe in 2011 – the first time since the industry was born over 60 years ago. The region’s sales totalled US$16 billion, up 25.5 per cent on 2010.
The Asia-Pacific airport retail market is experiencing an average duty-free and duty paid visit spend of US$104 and US$54 respectively. Factors driving purchases at airport retail stores include competitive prices, renowned brands at discounted prices, and last minute gift buying.
During the last six months, 46 per cent of Asia-Pacific travellers declared their purchases at duty-free airport retail stores were pre-planned, while 54 per cent of purchases were impulsive.
The biggest single product category is fragrances and cosmetics accounting for nearly 31 per cent of sales with wine and spirits at 17 per cent, confectionery and fine food at nine per cent, and tobacco goods at seven per cent. However other luxury goods, which include fashion, accessories, jewellery, watches and gifts, account for 37 per cent of sales, illustrating the appeal of luxury products to today’s travelling consumer.
Estee Lauder is one retailer that has experienced a huge amount of success within the Asia-Pacific airport retail market and this is down to China’s emerging middle class becoming the single largest driver of luxury sales growth within the region.
Estee Lauder’s growth in the Chinese prestige beauty market has largely relied on airport retail. The retailer anticipates some moderation in growth in the market over the next few quarters, and seeks to fuel further growth by expanding into smaller Chinese cities and airports.
According to industry experts China is likely to add 100 new airports in the next decade including emerging cities like Chongqing and Wuhan. Similar expansion is envisaged in India, with Indonesia and Vietnam also planning to expand airport infrastructure to meet surging demand from passengers utilising burgeoning low cost carriers.
GB
