Travel Retail market COVID-19 Impact, Trends & Business Statistics By 2025

Posted by Mrudula Anil Karmarkar on September 14th, 2021

The global travel retail market size is expected to reach USD 128.80 billion by 2025, according to a new report by Grand View Research, Inc. The market is projected to expand at a strong CAGR of 8.7% over the forecast years. Rapidly expanding retail and travel and tourism industry along with increasing per capita income levels is expected to drive the market growth. Different retail channels help in improving the retail experience of passengers while contributing to economic growth.

The airport retail segment is expected to gain traction over the forecast period and is expected to reach over USD 91.75 billion by 2025. On the basis of products, the perfume & cosmetics segment held a significant share of the market in 2017. Driven by the rising demand for branded cosmetics, such as makeup and skincare products, which are available discounted rates at the duty-free stores, the segment is projected to expand further.

The travel retail industry is focusing on enhancing customer experience and use data to provide customers an integrated experience. For example, Kuala Lumpur International Airport has integrated big data platform deployed for its KLIA2 terminal. This platform will extract passenger’s real-time location throughout the airport for real-time status checks, travel plans, and so on.

Travel retailers across different distribution channels, such as airport and ferries station, are focusing on providing an enhanced customer experience. Digitalization has led to the enhancement of the industry processes, which can help in boosting profits for the retailers. Digital technology can help passengers in carrying out boarding and check-in process.

Thus, travel retailers are increasingly using this technology to attract passengers into the stores and engage them across their travel journey while providing a seamless shopping experience. The travel retail needs to go through some substantial upgrades to create a retail ecosystem while collaborating with the air operators.

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The airline service provider can provide insight, such as data about passengers’ schedules, purchasing behavior, and others, which can be used to offer passengers a compelling shopping experience. In addition, due to changing demographics of the aviation industry, such as the growing number of millennial travelers, retailers need to use digitally-driven, omnichannel, and loyalty-based platforms to drive the buying power of consumers.

Travel Retail Market Report Highlights

• The global market accounted for USD 67.3 billion in 2017 and is expected to register a CAGR of 8.7% from 2018 to 2025
• Increasing number of international travelers across the globe is expected to boost the market growth
• The perfume & cosmetics segment is anticipated to witness the highest CAGR of 9.9% followed by the fashion & accessories segment over the forecast period
• Asia Pacific is anticipated to be the fastest-growing regional market due to increasing disposable income levels and expanding the travel industry in the region
• Key companies in the global travel retail market include Shilla DFS, Lagardere Group, Lotte Corp., Heinemann, and Dufry AG

There is intense competition in the market owing to the potential growth opportunities in the travel and tourism industry. The key players in the market include Dufry, Lotte Duty Free, Lagardère Travel Retail, DFS Group, Heinemann, and Shilla Duty Free.

Most of these companies are pursuing both inorganic and organic growth strategies to increase their market share. For instance, in September 2018 Dufry AH signed a contract with Perth Airport Pty. Ltd. (PAPL) to open two duty-free stores at arrival and departure areas at the international terminal of the airport. This contract will help the company to expand its footprint in Australia.

Grand View Research has segmented the global travel retail market on the basis product, channel:

Travel Retail Product Outlook (Revenue, USD Million, 2015 - 2025)

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

Travel Retail Channel Outlook (Revenue, USD Million, 2015 - 2025)

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

About Grand View Research

Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, we offer market intelligence studies ensuring relevant and fact-based research across a range of industries, from technology to chemicals, materials and healthcare.