Duty-Free Retailing Market Expected to Reach $94.2 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Duty-Free Retailing Market," The duty-free retailing market was valued at $33.7 billion in 2021, and is estimated to reach $94.2 billion by 2031, growing at a CAGR of 10.6% from 2022 to 2031.

As the world's borders are opening post-COVID-19 crisis, airlines from various nations are growing their international networks and creating new airports. Duty-free retailing involves selling goods to passengers majorly at airports and on cruises and ferries, border crossings, etc. The duty-free retailing business sells goods without charging consumers any taxes or excise levies. Buyers have access to a broad range of items including fashion and accessories, alcohol, tobacco, jewellery, etc. New airports are being built in some emerging nations to accommodate the rising passenger volume. The capacity of terminals enables smaller duty-free shops to build branded sections within larger stores, enabling higher-value sales, as well as specific brand outlets to build their retail area. Additionally, numerous cruise companies are also opening duty-free stores. All these factors are anticipated to drive the duty-free retailing market growth during the forecast period.

Globally the number of travelers across the world are increasing rapidly owing to rise in number of airport visitors. This is majorly owing to rise in the number of domestic and international travelers. The number of inbound and outgoing travelers is increasing significantly owing to rise in the number of airports visitors globally. Sports travel, business meetings have led to an increase in the number of travelers. For instance, UEFA Euro, UEFA Champions League, Summer Olympic games, and Premier Leagues are some of the key events that have attracted large number of travelers. Such sports events organized by several countries have led to an increase in the number of tourists and visitors. Owing to the same, the demand for duty-free retailing products across airports such as branded items, perfumes have observed significant growth. Some of the leading countries that have reported large-number of tourists include All the major European & Asian countries namely Germany, Switzerland, Italy, Japan, Singapore, Thailand, and others have attracted large number of visitors from across the world. These factors have largely contributed towards duty-free retailing market sales. 

However, duty-free shops are very responsive to international exchange rates. They are impacted by changes in the global market even though they operate in various nations and frequently trade in a variety of currencies, including the exchange rates for the Euro, Dollar, and British Pound. These currencies are converted using the current day's exchange rate. Depending on the changing exchange rate, duty-free retail firms, notably retail chains that sell luxury products, may be favorably or adversely impacted by currency exchange rates in the worldwide market. Growth in disposable incomes worldwide, majorly in the Asia-Pacific region is likely to offer lucrative growth opportunities to the duty-free retailing market during the forecast period. Duty-free shoppers in the Asia-Pacific region increasingly use digital platforms to facilitate their purchases.

The global duty-free retailing market share is segmented based on product type, sales channel, and region. By product type, it is classified into perfume & cosmetics, electronics, wine & spirits, food, confectionery & catering, tobacco, luxury goods and others. By sales channel, it is classified into airport, cruise liners, railway stations, border and down-town & hotel shop. By region, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

The key players profiled in the duty-free retailing market report include Duty-Free Americas, SHINSEGAE DUTY-FREE, Aer Rianta International, Dubai Duty-Free, China Duty-Free Group Co., Ltd., LOTTE HOTEL., DUFRY AG, HYUNDAI DEPARTMENT STORE DUTY-FREE, Lagardère group, and LVMH.

The report offers a comprehensive analysis of the global duty-free retailing market trends by thoroughly studying different aspects of the market including major segments, market statistics, market dynamics, regional market outlook, investment opportunities, and top players working towards the growth of the market. The report also sheds light on the present scenario and duty-free retailing market forecast trends & developments that are contributing to the growth of the market. Moreover, restraints and challenges that hold power to obstruct the market growth are also profiled in the report along with the Porter’s five forces analysis of the market to elucidate factors such as competitive landscape, bargaining power of buyers and suppliers, threats of new players, and emergence of substitutes in the market. The complete qualitative and quantitative duty-free retailing market analysis is provided in the report.

Impact of Covid-19 on the Global Duty-Free Retailing Industry

• COVID-19 impacted almost all businesses including the duty-free retailing business. Many duty-free retailing market players stopped their operations owing to import-export restrictions 
• The fear of contracting the novel coronavirus led to sluggish demand in the market. Social distancing norms closed borders, and production constraints, due to the pandemic, across various countries such as China, India, and the U.S. have affected the global market
• The steep drop in the number of passengers worldwide hindered the commercial revenues of airline firms. Thus, negatively affecting the duty-free retailing market size

Key Findings of the Study

• Based on product type, the perfume & cosmetics sub-segment emerged as the global leader in 2021 and is expected to remain dominant throughout the forecast period
• Based on Sales Channel, the airports sub-segment emerged as the global leader in 2021 and is predicted to show the fastest growth in the upcoming years
• Based on region, the Asia-Pacific market registered the highest market share in 2021 and is projected to maintain the position during the forecast period.