The global travel retail market size was valued at USD 67.30 billion in 2017 and is expected to witness a CAGR of 8.7% from 2018 to 2025. Rising number of international travelers is expected to be one of the prime factors driving the industry. Moreover, affordable travel choices and rising middle-class population in emerging Asian countries are anticipated to augment the market growth.
Travel retailers across different distribution channels, such as airport and ferries station, are focusing on providing an enhanced customer experience. Digitalization has led to the enhancement of the industry processes, which can help in boosting profits for the retailers. Digital technology can help passengers in carrying out boarding and check-in process.
Thus, travel retailers are increasingly using this technology to attract passengers into the stores and engage them across their travel journey while providing a seamless shopping experience. The travel retail needs to go through some substantial upgrades to create a retail ecosystem while collaborating with the air operators.
The airline service provider can provide insight, such as data about passengers’ schedules, purchasing behavior, and others, which can be used to offer passengers a compelling shopping experience. In addition, due to changing demographics of the aviation industry, such as the growing number of millennial travelers, retailers need to use digitally-driven, omnichannel, and loyalty-based platforms to drive the buying power of consumers.
The airport segment led the market in 2017 accounting for over 71.2% of the overall market share. Growing number of air passengers owing to low airfares and enhanced living standards is expected to contribute to the segment growth. Moreover, efforts taken by different airports to increase revenue from non-aeronautical resources have accelerated the development of the retail sector in this segment.
The border, downtown & hotel shops segment is expected to witness the highest CAGR over the forecast period. These types of shops signify the latest trends. Retailers benefit from the lower rents for such shops in border and downtown areas as compared to the airport area.
On the basis of product, the market has been divided into perfume & cosmetics, confectionery & fine food, wine & spirit, fashion & accessories, electronics, tobacco, others. The perfume & cosmetics segment accounted for a major revenue share in 2017 due to increased sales of the various personal care products at different retail channels.
Cosmetics brands such as L’Oreal are opening new stores across different airports across the globe. This factor is expected to drive the segment growth further. Wine & spirit was the second-largest segment in 2017 and is projected to witness steady development in the years to come. Alcoholic spirits are among the most commonly purchased items through the duty-free stores as they are available at cheaper prices at these stores.
The Asia Pacific market was valued at USD 28.75 billion in 2017. The region is projected to expand further at the highest CAGR over the forecast period. Growing middle-class population and increasing travel and tourism sector in emerging Asian countries, particularly, in China, is expected to boost the market. Thus, many stores in the APAC market are aligning their strategies and products to meet the needs of Chinese travelers. This factor is also expected to have a positive impact on industry growth. In addition, enhanced living standards as a result of rising consumer disposable income levels in emerging economies are augmenting market development.
There is intense competition in the market owing to the potential growth opportunities in the travel and tourism industry. The key players in the market include Dufry, Lotte Duty Free, Lagardère Travel Retail, DFS Group, Heinemann, and Shilla Duty Free.
Most of these companies are pursuing both inorganic and organic growth strategies to increase their market share. For instance, in September 2018 Dufry AH signed a contract with Perth Airport Pty. Ltd. (PAPL) to open two duty-free stores at arrival and departure areas at the international terminal of the airport. This contract will help the company to expand its footprint in Australia.
Market size value in 2020
USD 82.5 billion
Revenue forecast in 2025
USD 128.8 billion
CAGR of 8.7% from 2018 to 2025
Base year for estimation
2015 - 2016
2018 - 2025
Revenue in USD million/billion and CAGR from 2018 to 2025
Revenue forecast, company ranking, competitive landscape, growth factors, and trends
Product, channel, region
North America; Europe; Asia Pacific; Latin America; Middle East & Africa
U.S.; Canada; U.K.; Germany; China; India; Japan; Brazil; Mexico
Key companies profiled
Dufry; Lotte Duty Free; Lagardère Travel Retail; DFS Group; Heinemann; Shilla Duty Free
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This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2025. For the purpose of this study, Grand View Research has segmented the global travel retail market report on the basis of product, channel, and region:
Product Outlook (Revenue, USD Million, 2015 - 2025)
Perfume & Cosmetics
Confectionery & Fine Food
Wine & Spirit
Fashion & Accessories
Channel Outlook (Revenue, USD Million, 2015 - 2025)
Border, Down Town & Hotel Shops
Railway Stations & Others
Regional Outlook (Revenue, USD Million, 2015 - 2025)
b. The global travel retail market size was estimated at USD 76.7 billion in 2019 and is expected to reach USD 82.5 billion in 2020.
b. The global travel retail market is expected to grow at a compound annual growth rate of 8.7% from 2018 to 2025 to reach USD 128.8 billion by 2025.
b. Asia Pacific dominated the travel retail market with a share of 44.1% in 2019. Growing middle-class population and increasing travel and tourism sector in emerging Asian countries, particularly, in China, is expected to boost the market.
b. Some key players operating in the travel retail market include Dufry; Lotte Duty Free; LagardÃ¨re Travel Retail; DFS Group; Heinemann; and Shilla Duty Free.
b. Key factors that are driving the market growth include affordable travel choices, rising middle-class population, and increasing number of international travelers across the world.
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