According to a new report – “Travel Retail Market by Product and Channel: Global Opportunity Analysis and Industry Forecast, 2017-2023,” the global travel retail market size was valued at $69.5 billion in 2016, and is projected to reach $125.1 billion by 2023, growing at a CAGR of 8.9% from 2017 to 2023.
Perfumes & cosmetics segment in the global travel retail market possesses a strong customer base. Some of the leading companies such as Estee Lauder, L’Oréal, Rituals Cosmetics, Revlon, and others are expanding their businesses by opening their outlets at every international airport with an exclusive and wide range of fragrances and skin care products.
Development of the in travel & tourism industry, rapid urbanization, and change in lifestyle, owing to increased disposable income of the consumers drive the growth of the travel retail market. In addition, increase in travel & tourism or international tourist arrivals in the emerging economies, such as Asia-Pacific and LAMEA is anticipated to create lucrative opportunities for the global travel retail market. However, unorganized local markets and stringent regulations in airport retailing hamper the travel retail market growth.
Wines & spirits is the second largest revenue contributor in travel retail market. The consumption of wines, particularly luxury wines and spirits has increased considerable growth in the past few years. In addition, it has been observed that luxury wines & spirits are highly preferred by the international passengers, which leads to the growth of the market.
Asia-Pacific is the largest travel retail market in the world, and is growing at the fastest rate owing to improvements in living standards, rise in disposable income, and development of the tourism industry.
Furthermore, Europe is one of the largest travel retail markets, owing to its stronger base of luxury products. The region possesses some of the biggest apparels and cosmetics brands, namely, LVMH from France and H&M from Sweden, which hold a significant share in the luxury apparels, perfumes, and cosmetics sector, thereby making it the second largest travel retail market. Wealthy tourists from the Middle East, China, the U.S., and Russia contribute significantly towards the growth of the European travel retail market. Being the historical home of most of the luxury houses, Europe’s market accounts for nearly $21 billion of the travel retail sector.
KEY FINDINGS OF THE STUDY
• In 2016, airports accounted for the maximum market revenue, and is projected to grow at a CAGR of 9.0 % during the forecast period.
• Border, downtown, and hotel shops is expected to grow at the highest CAGR of 9.4%.
• Perfumes & cosmetics accounted for more than 30% of market share in 2016, and is expected to dominate the global market by 2023.
• The luxury goods segment is expected to grow at the highest CAGR of 11.5% during the forecast period.
• China is the major shareholder in the Asia-Pacific travel retail industry, and accounted for around 65% share in 2016.