By Irene Gaitirira
Published January 21, 2018
The global travel retail market size is projected to hit the US$125.1 Billion mark by 2023.
Travel Retail Market by Product and Channel: Global Opportunity Analysis and Industry Forecast, 2017-2023, a report by a USA-based market research and business-consulting company, says the market size, that is expected to grow at a compound annual growth rate (CAGR) of 8.9% between 2017 and 2023, shall almost double from US$69.5 Billion in 2016.
Allied Market Research, the business-consulting company that operates out of Portland, Oregon, says companies such as Estee Lauder, L’Oréal, Rituals Cosmetics and Revlon are expanding their businesses by opening their outlets at every international airport with an exclusive and wide range of fragrances and skin care products as Perfumes & cosmetics segment possesses a strong customer base.
Allied Market Research says development of the in travel & tourism industry, rapid urbanization, and change in lifestyle owing to increased disposable income of the consumers are some of the factors that are expected drive the growth of the travel retail market.
Though increase in travel & tourism or international tourist arrivals in emerging economies, such as Asia-Pacific, is anticipated to create lucrative opportunities for the global travel retail market, the research and business consulting firm that also operates out of Pune in India cautions that ‘unorganised local markets and stringent regulations in airport retailing [may] hamper the travel retail market growth’.
Wines & spirits, that are ‘highly preferred by the international passengers’, is the second largest revenue contributor after the Perfumes & cosmetics segment.The consumption of luxury wines and spirits has increased considerable growth in the past few years, Allied Market Research says.
The firm says Asia-Pacific is the largest travel retail market in the world and is growing at the fastest rate owing to improvements in living standards, rise in disposable income, and development of the tourism industry.
Europe, Allied Market Research says, is one of the largest travel retail markets, owing to its stronger base of luxury products. The region possesses some of the biggest apparels and cosmetics brands, such as LVMH from France and H&M from Sweden, which hold a significant share in the luxury apparels, perfumes, and cosmetics sector, thereby making it the second largest travel retail market.
Wealthy tourists from the Middle East, China, USA and Russia contribute significantly towards the growth of the European travel retail market, Allied Market Research says. Being the historical home of most of the luxury houses, Europe’s market accounts for nearly US$21 Billion of the travel retail sector.
The key players in travel retail industry focus to expand their business operations in the emerging countries by adopting various strategies, such as acquisition and contact/agreement. The major players profiled in this report include DFS Group, Dufry, LS travel retail, Lotte Duty Free, King Power International Group, The Shilla Duty Free, Gebr, Heinemann, China Duty Free Group (CDFG), Aer Rianta International (ARI), and The Naunace Group.
Major Highlights of the Study byAllied Market Research:
- In 2016, airports accounted for the maximum market revenue, and is projected to grow at a CAGR of 9.0 % during the forecast period
- Border, downtown, and hotel shops is expected to grow at the highest CAGR of 9.4%
- Perfumes & cosmetics accounted for more than 30% of market share in 2016, and is expected to dominate the global market by 2023
- The luxury goods segment is expected to grow at the highest CAGR of 11.5% during the forecast period, and
- China is the major shareholder in the Asia-Pacific travel retail industry, and accounted for around 65% share in 2016.