Global Travel Retail Market: Expanding the Market Presence in Developing Regions of the World

Global Travel Retail Market

Travel retail is commonly known as duty free method of sale of goods in different product categories. This mode of sale involves lack of taxation on the sale of goods as they are designed for travelers as they will consume the products outside the region of sale, therefore taxes of the region of sale is not levied. This mode of sale also limits the quantity of goods being purchased by a particular individual, they are not permitted to consume more than a particular volume of good deemed permissible.

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The main factors behind the growth of the market are:

  • Surge in adoption of travel & tourism services: There has been a renewed focus of individuals and different organizations adopting various travel-based services and solutions, this is due to the fact that the fast-paced life has given rise to a stressful environment. To revitalize themselves, many individuals are enhancing the volume of vacations that they take which is presenting the market players of travel retail with a larger target population to focus on their marketing strategies on and subsequently enhance their revenues
  • Significant rush in the levels of urbanization of the world: Another factor that is having a positive impact on the travel retail market as a whole is the levels of urbanizations undergoing globally, this has enhanced the number of travelers globally whether that be for business purposes, recreational activities or even some personal reasons. This trend has increased the overall footfall of consumers in travel retail stores as they offer goods at a significantly low-cost in comparison to the products being available in normal retail modes of sale

The market is segmented on the basis of product type as perfume & cosmetics, wine & spirits, electronics, fashion & accessories, luxury goods, food, confectionaries & catering, tobacco, others; sales channel as airport, cruise liner, railway station, border, downtown, hotel shops, others.

Some of the key market developments are as follows:

  • In July 2019, Alfred Dunhill, Ltd. announced their plans for expansion of their presence in the Asia-Pacific market. The company will expand their presence by inaugurating a new store in partnership with China Duty Free Group at Terminal 2 of Shanghai Hongqiao, while looking at various other locations to target. The popularity of their brand is due to their high digital ranking putting them above various large-scale luxury brands globally which has been achieved with the help of targeting regions of Asia-Pacific and expanding their revenues from travel retail
  • In July 2019, Lagardère Travel Retail announced that they had won a duty free contract for Prague Airport for a period of 10 years. The contract is for the “Václav Havel Airport” situated in Prague and will allow for establishment of twenty-four units spread across 4,372 square meter. This will help the company in presenting new brands which can help in the expansion of the products offered by the organization

 “According to Data Bridge Market Research, global travel retail market is expected to reach USD 146.53 billion, growing at a substantial CAGR during the forecast period of 2019 to 2026”

Some of the major players operating in the market are Aer Rianta International; DFS Group Ltd.; KING POWER International; DubaiDutyFree.com; China Duty Free Group Co.,Ltd.; Gebr. Heinemann SE & Co. KG; Dufry; Duty Free Americas, Inc.; Lotte Duty Free; Lagardère Travel Retail; THE SHILLA DUTY FREE; Flemingo; JR/Group; Qatar Duty Free; 3Sixty Duty Free among others.

The major focus of travel retail companies currently is the expansion of their presence in geographical areas such as Asia-Pacific, Latin America and Middle East & Africa. These regions are experiencing a high volume of individuals and passengers travelling from and towards this region. This presents the players with an opportunity to enhance their revenues by providing consumers of these regions with products and components in a travel retail form.