June 23, 2020
As per the report titled ‘Duty Free Retailing Market to 2027 - Global Analysis and Forecasts by Product Type; Application, available with Market Study Report LLC, global duty free retailing market accrued USD 77.87 billion in 2018 and is projected to amass USD 155.3 billion by the year 2027, expanding with a healthy CAGR of 8.44% throughout.
Global duty free retailing market is primarily driven by increasing travel & tourism across the globe, cites the report. Moreover, shifting focus among vendors towards digitalization of retail processes, integration of advanced technologies such as AR and VR to improve customer experience, and rising demand for duty-free luxury & premium products are expected to augment the industry growth.
For the uninitiated, duty free retailing involves selling products to international travelers, wherein the retailers are exempted from certain local or national taxes. It is a substantial income source and offers several marketing opportunities. Duty-free retailing spaces appeals travelers with extra time to indulge in the ambiance and shopping experience of international duty-free products.
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As per the regional analysis, Asia Pacific garnered over half of global duty free retailing market share in 2018 and is slated to exhibit a strong CAGR over the forecast duration. Introduction of new air routes and growing accessibility of low-cost carriers are favoring the regional market expansion. In addition, increasing purchasing power among the middle-class population in developing economies is expected to present new growth prospects for the industry partakers in the coming years.
Meanwhile, Europe, after APAC, was the second largest market in 2018. Presence of several tourist hotspot countries, in tandem with rich heritage and well-established luxury & premium retail chains across the region are fueling the industry growth in Europe. Increasing competitiveness among European players is another factor influencing the regional market growth. For instance, in 2017, Hellenic Duty-Free Shops, a subsidiary of Dufry, signed a contract with Fraport Greece for operating its retail services at 14 Greek airports for 30 years. In the following year, Dufry opened a new duty-free store at Norwich airport in an effort to improve passenger communication. On the contrary, in 2019, KLM Royal Dutch declared to stop sale of duty-free products on its European flights, hence negatively impacting the industry outlook.
Key players operating in global duty free retailing market are China Duty Free Group Co., Ltd., Aer Rianta International (ARI), Dubai Duty Free, Gebr. Heinemann, Duty Free Americas, King Power International Group, Shinsegae Duty Free, Lotte Duty Free, The Shilla Duty Free, Lagardère Travel Retail, LVMH, Dufry AG, and Hyundai Duty Free.