According to new data from the leading global duty free and travel retail body Tax Free World Association, sales in 2015 in this significant retail business stood at a substantial US$62.1 billion, leaving the sector’s claim to be ‘the sixth continent’ of retail firmly intact.
The data shows that the largest category remains fragrances and cosmetics, which accounts for US$19.5 billion of sales. 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 (US$7.8 billion), watches, jewellery and fine writing (US$5.5 billion) and confectionery and fine food (US$4.8 billion).
Well over a third (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.
The lion’s share 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 at what TFWA terms ‘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 were up by 2.6%, bucking the trend in many parts of the region. Two markets also increased substantially in Asia; sales of fragrances and cosmetic were up by a very healthy 18.3% to US$9.5 billion, while tobacco sales rose by 8.5% to US$2.7 billion.
However, global sales in this major retail business have fallen in the past year. TFWA said volatility in currency exchange rates and the global economy were negative factors that have impacted the business. The organisation also cited geo-political tensions and terrorism that had a profound impact on passengers’ ability and willingness to travel via airports as a curb on growth. In spite of this, there is no shortage of reasons for optimism when it comes to the long-term vision for the business. ‘We have faced similar challenges many times before,” said TFWA president Erik Juul-Mortensen, “and every time, the sector has bounced back.”
In Asia, for example, 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,’ continued Juul-Mortensen. “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.”
The data was compiled by long-established and respected specialist duty free and travel retail research company Generation Research.
Founded in 1984, TFWA is the world’s biggest duty free and travel retail industry association, providing the industry with high-quality exhibitions, acclaimed conferences and workshops, and in-depth market research.
TFWA is instrumental in forging close relationships between suppliers and retailers, and plays a vital role in representing the interests of its members and the industry as a whole. It provides the global industry with business support and a forum for dynamic development.
TFWA’s commitment to the duty free and travel retail industry is summarised by its motto – by the trade for the trade. As a non-profit-making organisation – and with a membership of 500 companies including some of the world’s best-known brands and suppliers of premium products – TFWA’s range of products and services are focused purely on delivering value to the industry.
For further information please contact:
TFWA Press Office/Templemere PR
Email: press@tfwa.com
Tel: +44 (0)1306 735574
www.tfwa.com
Daisy Fannin
Business Management & Account Executive
Paper Mews Place, 290 High Street, Dorking, Surrey, RH4 1QT, UK
Tel: +44 (0)1306 735574
DD: +44 (0)1306 735654
Mob: +44 (0) 7962 212458
