Sales for the global duty free and travel retail body, Tax Free World Association (TFWA), stood at a substantial US$62.1 billion in 2015, leaving the sector’s claim to be ‘the sixth continent’ of retail firmly intact.
Growth remains strong in many parts of the sector, and the long-term prospects for the business are good, according to the association. The largest category remains fragrances and cosmetics, which accounts for US$19.5 billion of sales, the association’s data shows.
Just over US$10 billion is spent on wines and spirits, while the third largest category is fashion and accessories, valued at just under US$9 billion. Other important product categories include tobacco at US$7.8 billion, watches, jewellery and fine writing at US$5.5 billion and confectionery and fine food at US$4.8 billion.
Over a third, or US$25.2 billion, of the global duty free business is in Asia, while the next largest region in sales terms is Europe, accounting for just under US$19 billion.
A large chunk of the business was at airports, where US$35.2 billion of sales were achieved, with sales of over two billion on airlines, US$2.6 billion, and ferries, US$2.2 billion. However, US$22.1 billion of sales were recorded under TFWA’s ‘other’ duty free retail. This includes downtown duty free (a burgeoning phenomenon that is transforming duty free retail in Asia), border shops and cruise outlets.
Sales in Asia Pacific saw a 2.6 per cent increase, bucking the trend in many parts of the region. Two markets also increased substantially in Asia; sales of fragrances and cosmetic were up by 18.3 per cent to US$9.5 billion, while tobacco sales rose by 8.5 per cent to US$2.7 billion.
In Asia, the growth in air travel far outstrips the growth in GDP and in 2015, 1.6 billion people in Asia travelled by air.
“That’s a huge potential customer base for us,” said Erik Juul-Mortensen, TFWA president, speaking at the Tax Free World Association’s Asia Pacific conference.
“It’s a similar picture elsewhere, and all the major international authorities, including the World Tourism Organisation, are similarly upbeat about the future of international air travel. This is a great business to be in,” he added.
The data was compiled by specialist duty free and travel retail research company Generation Research.
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