Global duty-free retailing to hit US$98 billion
Global duty-free retailing is expected to reach nearly US$98 billion in revenue by 2019, according to a new study by global technology research and advisory company Technavio.
With the expansion of low-cost airlines, many middle-class travellers are taking inexpensive holidays, a trend that has helped the Asia Pacific and Middle East emerge as the fastest-growing regions for duty-free retail marketing, says Technavio analyst Vijay Sarathi.
He says China, India, Indonesia, South Korea and Sri Lanka were among some of the most-desired inexpensive destinations in 2014.
“During the same period, it is estimated that international tourist inflow in APAC increased to almost 263 million travellers, and it has largely helped the market grow until 2019.”
Just released in London, Technavio’s report, Global Duty-Free Retailing Market 2015-2019, provides an in-depth analysis of market growth in terms of revenue and emerging market trends.
By products, the global duty-free retailing market for 2014 comprised fashion accessories and hard luxury (32.1 per cent), perfume and cosmetics (29.21 per cent), wines and spirits (16.02 per cent), tobacco (12.43 cent), and confectionery and fine food (10.25 per cent), says the report.
It says the fashion, accessories and hard luxury segment was valued at close to $20.81 billion, with the most in-demand products including precious jewellery, briefcases, handbags and shoes. The more popular brands include Armani, Burberry, Fossil, Gucci and Michael Kors.
Technavio researchers say Chinese travellers emerged as the largest consumers of luxury brands last year, contributing nearly 25 per cent of global revenue.
The perfumes and cosmetics segment is one of the fastest-growing categories in the global duty-free retailing market. APAC and the Middle East are the key regions for this category, with some of the top-selling brands including Chanel, Christian Dior, Estee Lauder and Guerlain.
With close to 21.5 per cent of revenue share in the category, L’Oreal created a division especially for duty-free stores in 2013, describing the division as “the sixth continent”. In 2014, L’Oréal launched theVichy and Kerastase brands in the duty-free retail segment in Asia, and also launched the Three-Minute Beauty program to engage with potential luxury product buyers at airports.
The liquor category is expected to grow to $13.47 billion in 2019. In 2014, Diageo opened two Johnnie Walker Houses in duty-free shops in India and Taiwan.