The Asia Pacific duty-free retailing market grew at a CAGR of around 9% during 2014-2019. Duty-free shops refer to the retail outlets where goods are exempted from national taxes and duties for providing a unique sales channel for international travelers and tourists. These outlets are majorly located at international airports, seaports, border shops, international train stations, and onboard aircraft. Duty-free retailing offers a broad range of products, including perfumes, cosmetics, alcohol, confectionaries, electronics, fashion accessories, etc.
In the Asia Pacific region, the expanding travel and tourism sector along with the rising number of new international routes is primarily driving the market for duty-free retailing. Moreover, the increasing levels of urbanization along with the emergence of low-cost carrier (LCC) airlines are also propelling the sales of duty-free goods in the region. The market is further driven by the emergence and growth of duty-free stores across international airports and seaports. Moreover, the wide presence of duty-free goods pertaining to country-specific culture and heritage has also attracted numerous international tourists. Additionally, the increasing popularity of duty-free retail stores offering various luxury and premium brands is also driving the market growth. Rising digitalization along with the increasing penetration of social media marketing strategies has enabled several retailers to promote their exclusive products to the international customers. The wide availability of duty-free goods on e-commerce platforms is also catalyzing the market growth in the Asia Pacific region. Besides this, the growing penetration of self-service stations, such as kiosks, and other interactive sales channels has enabled retailers to overcome linguistic barriers with their customers.
The outbreak of the COVID pandemic, in early 2020, however, has negatively impacted the market for duty-free retailing in the Asia Pacific region. The pandemic resulted in national lockdowns across the region resulting in restrictions in international travel, creating a negative impact on the industry. The Asia Pacific duty-free retailing market, however, is expected to recover from 2021 and exhibit moderate growth during 2021-2025.
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The competitive landscape of the industry has also been examined with some of the key players being China Duty Free (Group) Co. Ltd., DFS Group Ltd. (LVMH), Dufry AG, Ever Rich D.F.S. Corporation, Japan Airport Terminal Co. Ltd., King Power International Company Limited, Lagardère Travel Retail Pacific (Lagardère Group), Lotte Duty Free (Lotte Corporation), Shinsegae DF Inc. (Shinsegae Inc.), and The Shilla Duty Free Shop (Hotel Shilla Co., Ltd.).
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