The Colombia travel retail market size was valued at USD 395.5 million in 2018, registering a CAGR of 8.3% from 2019 to 2025. The market is anticipated to be driven by the rising number of international travelers and the growth of the travel and tourism industry. Colombia is Latin America’s third-largest air travel market after Brazil and Mexico. According to the World Travel & Tourism Council (WTTC), the Colombian capital of Bogota alone accounts for 29% of Colombia’s tourism activity. The anticipated surge in international passenger traffic in the next few years is expected to have an impact on travel retail.
Caño Cristales, a remote river canyon, was closed to tourists for several years because of guerrilla activity. The Colombian government has taken several efforts to regulate the tourism industry including the demobilization of the largest guerrilla group in Caño Cristales, thereby driving the market. The untapped travel retail channels, such as downtown and hotel shops, railway stations, and cruise lines, are expected to witness significant growth in line with the rising disposable income and the increasing number of tourists. The penetration levels of travel retail at airports are also expected to grow significantly over the next decade, which can be attributed to the significant investment opportunities that are created as a result of foreign direct investments.
A rising number of air passengers owing to enhanced standard of living and low airfares is expected to contribute to the growth of travel retail. Political stability and improved security situation drive the tourism industry. Additionally, owing to the changing nature of the air travel industry, such as the growing number of millennial travelers, retailers are increasingly focusing on offering digitally driven platforms to drive consumer buying power. Moreover, a growing number of efforts taken by various airports to improve the revenue from other non-aeronautical resources has accelerated the advancement of the retail sector.
The continued development of the travel and tourism industry has improved the growth prospects of the retail sector. The growth of Colombia's travel and tourism industry is subsequently driving the demand for perfumes, cosmetics, confectioneries, fine food, wine and spirit products, apparel, electronics, tobacco products, and other products, such as watches and gifts. An improving economy and the rising levels of the disposable income of Colombian middle-income households are expected to act as a catalyst for travel retail. The changing international perception about the Colombian business environment following the execution of the newly signed free trade agreements is also expected to drive the growth of the Colombia travel retail market.
Based on product, the market has been segmented into perfume and cosmetics, wine and spirit, confectionery and fine food, fashion and accessories, tobacco, electronics, and others. Perfume and cosmetics generated the highest revenue in 2018, accounting for 30.6% of the market share. According to studies, people across all age groups usually spend around USD 30 on perfumes and cosmetics on a single purchase. Additionally, an increased preference for perfumes and cosmetics by millennials and middle-aged consumers is projected to drive the segment over the forecast period.
The fashion and accessories segment accounted for the second-largest market share of 22.8% in 2018. Strong government support for organizations with international certificates such as ISO 14000, BASC, and ISO 9000 and favorable commercial trade agreements drive the country’s fashion industry position in the South American region. The local fashion and accessory manufacturers have a competitive advantage over international fashion and accessory manufacturers owing to unique design and product quality, thereby driving the retail sector in the country.
On the basis of channel, the market has been classified into airports, cruise lines, border, downtown, and hotel shops, and railway stations and others. The airport segment accounted for the largest market share in 2018. The increasing number of airline passengers across the globe is driving the market growth for this segment. Moreover, duty-free product sales in Colombia airports have increased over the last few years. In Colombia, the airline industry is undergoing a complete transformation with an increase in airline routes and the arrival of low-cost airlines.
The border, downtown, and hotel shops segment held the second-largest market share in 2018 and is expected to witness considerable growth over the forecast period. The rise in local travel and tourism has increased the demand for electronic, fashion and accessories, and fine food items stores at the border, downtown, and hotels, thereby driving the retail sector. Retailers have a potential opportunity to gain higher profits and experience better operational performance owing to lower rents for shops at border and downtown areas in comparison to airports.
The industry has undergone unprecedented structural changes and consolidation in recent years in the form of partnerships, mergers, acquisitions, and the foray of new overseas competitors. There is moderate competition in the market owing to the limited number of players active in the market. However, companies are focusing on partnerships and expansions to enter the Colombian market. Moreover, the government plans to expand the airport passenger capacity over the next few years which is expected to offer potential growth opportunities for retail operators in the travel and tourism industry.
Prominent players in operating in the market include Duty Free Americas, Inc. (DFA); Dufry and 3Sixty Duty Free; Motta International; Areas; and Duty Free Partners. A majority of these companies adopt both organic and inorganic growth strategies to increase their market share. For instance, in November 2019, Duty Free Americas, Inc., in partnership with Diageo Global Travel and Middle East (GTME), opened a Diageo store at El Dorado International airport (Colombia). The store was the first Diageo retail shop in the Latin American region.
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Attribute |
Details |
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Base year for estimation |
2018 |
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Actual estimates/Historical data |
2015 - 2017 |
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Forecast period |
2019 - 2025 |
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Market representation |
Revenue in USD million and CAGR from 2019 to 2025 |
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Report coverage |
Revenue forecast, company share, competitive landscape, growth factors and trends |
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15% free customization scope (equivalent to 5 analysts working days) |
If you need specific information, which is not currently within the scope of the report, we will provide it to you as a part of customization |
This report forecasts revenue growth at country level and provides an analysis of latest industry trends and opportunities in each of the sub-segments from 2015 to 2025. For the purpose of this study, Grand View Research has segmented the Colombia travel retail market report on the basis of product and channel:
Product Outlook (Revenue, USD Million, 2015 - 2025)
Perfume & Cosmetics
Confectionery & Fine Food
Wine & Spirit
Fashion & Accessories
Electronics
Tobacco
Others
Channel Outlook (Revenue, USD Million, 2015 - 2025)
Airports
Cruise Lines
Border, Downtown & Hotel Shops
Railway Stations & Others
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