Global Duty Free market to grow by 25 billion dollars by 2019
By Vivian Hendriksz
Apr 24, 2015
The global duty free market is predicted to increase 51 percent from 48.7 billion dollars in 2014 to 73.6 billion dollars by 2019 as the ongoing expansion of low cost airlines, larger airplanes and additional airports increase to accommodate the number of international travellers, according to the latest report from retail research agency Conlumino.
The number of outbound international travellers is predicted to reach over a billion by 2018, an additional 142 millions travellers than in 2013. “This factor is attracting mainstream retailers to the channel as well as luxury brands, as they recognise its potential to reach a high footfall, constantly changing, captive audience of shoppers,” commented Maureen Hinton, research director at Conlumino.
In order to tap into the full potential of this channel and satisfy consumers, duty free stores and operators have been working to improve their retail environments and the availability of international brands, as well as offering a wider selection of product ranges and price points. More and more airports around the world are also dedicating more space to retail, with major hubs such as Heathrow, Dubai, Singapore’s Changi and Amsterdam’s Schiphol rapidly becoming popular shopping destinations.
However, it is South Korea which currently leads the global market for duty free, attracting travellers from China and other Asian Pacific countries, although China is set to become the largest market by 2019 as it continues to expand its own duty free channel. Chinese travellers are a main driver of duty free sales across the world, as their expanding population and middle class have boosted international travel for both leisure and business. The UK is currently the fourth largest duty free market, coming in after the US and generating 3.7 billion dollars sales in 2014.
“Duty free retailing is becoming a mainstream shopping channel and retailers can not only sell to a captive audience, but also showcase their brands to international travellers, and discover where the demand lies for international expansion," adds Hinton.