Travel Retail Market

The global travel retail market size was valued at USD 82.3 billion in 2020 and is anticipated to register a considerable CAGR during the forecast period, 2021-2028. The growth of the market is attributed to rise in number of international travelers.

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Travel retail is a worldwide industry that sells products to foreign travelers. For sales at travel retail shops, specific local or national taxes and excise duties must be paid. It is usually mandated for the items to be sold exclusively to tourists who intend to transport them out of the nation. The products that travel retail can sell vary by jurisdiction and are governed by distinct rules that are based on import allowance restrictions, excise duty computations, and other factors. Border stores, onboard aircraft during international flights, some international railway stations, cruise & ferry shops on boats in international waters, and for the provisioning of ships travelling in international waters are all places where one can buy from travel retail.

The COVID-19 has brought negative impact on the market owing to lockdown and travel ban by governments across the globe, which disrupted the sales and demand & supply chain. The market is expected to resume gradually by the end of year 2021.

Market Trends, Drivers, Restraints, and Opportunities

• Focus on providing enhanced customer experience is projected to drive the market expansion during the forecast period.
• Development of the travel and tourism industry globally is one of the key factors driving the market growth.
• Unorganized local markets and their irregular transactions related to demand for products acts as a major challenge that can restrict the market growth in the coming years.
• Stringent government rules & regulations related to supply and stores is likely to hinder the market growth during the forecast period.
• Growing number of millennial travelers is expected to create a significant growth opportunity for the market in the near future.

Scope of the Report

The report on the global travel retail market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Market Segment Insights

Airport segment is expected to grow at a rapid pace

Based on channels, the global travel retail market is segmented into railway stations & others, cruise lines, airports, and border, down town & hotel shops. The airport segment is expected to grow at a rapid pace during the forecast period attributed to low airfares and enhanced living standards of travelers. However, the border, downtown & hotel shops segment is anticipated to hold a key share of the market in the coming years due to lower rents for those shops in downtown and border areas as compared to the airport area shops.

Perfume & cosmetics segment is projected to expand at a considerable CAGR

On the basis of products, the market is segregated into electronics, fashion & accessories, wine & spirit, perfume & cosmetics, confectionery & fine food, tobacco, and others. The perfume & cosmetics segment is projected to expand at a considerable CAGR during the forecast period attribute to increased sales for various personal care products at different retail channels. On the other hand, the wine & spirit segment is anticipated to account for a major market share during the forecast period due to the reason being most commonly purchased items through the duty-free stores as they are available at inexpensive prices compared to their normal prices.

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Asia Pacific is anticipated to constitute a key market share

In terms of regions, the global travel retail market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is expected to constitute a key share of the market during the projected period owing to rising middle-class travelers and increasing travel & tourism sector in the region. Moreover, change in living standards as a result of increase in consumer disposable income is further expected to drive the market growth in the region.

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Segments

The global travel retail market has been segmented on the basis of

Channels

• Railway Stations & Others
• Cruise Lines
• Airports
• Border, Down Town & Hotel Shops

Products

• Electronics
• Fashion & Accessories
• Wine & Spirit
• Perfume & Cosmetics
• Confectionery & Fine Food
• Tobacco
• Others

Regions

• Asia Pacific
• North America
• Latin America
• Europe
• Middle East & Africa

Key Players

• DFS Group
• Shilla Duty Free
• Dufry Group
• Lotte Duty Free
• Lagardère Travel Retail
• Heinemann Duty Free

Competitive Landscape

Key players competing in the global travel retail market are DFS Group; Shilla Duty Free; Dufry Group; Lotte Duty Free; Lagardère Travel Retail; and Heinemann Duty Free. Some of these players are actively engaged in various market development strategies, such as capacity expansion, new product launches, acquisition, partnership, collaboration, and mergers to increase their market share.
For instance, in September 2018, Dufry Group made a deal with Perth Airport Pty. Ltd. (PAPL) to open two duty-free stores at departure and arrival areas at the international terminal in the airport. This deal helped the company to expand its footprint in Australia.