Duty-free retailing market home to the world's most prestigious brands

The global duty-free retailing market has experienced consistent growth since the year 2000, increasing at a compound annual growth rate (CAGR) of 7% over this time.

This success has been despite major terror incidents, regulatory changes in the EU and the worst recession since 1929. With further investment planned and traveller numbers expected to rise, the duty-free retailing market is forecast to grow strongly to 2016.

The duty-free retailing market remains a small but dynamic channel. Ignored by many in the fast moving consumer goods (FMCG) world, it has become a vital source of revenue and profit for tobacco, spirits, beauty, and personal care players.

However, as the industry has matured, it has repositioned itself as a viable luxury channel by losing the "cheap cigarettes and alcohol" image.

The duty-free retailing market is now home to the world's most prestigious brands - Christian Dior, Estée Lauder, Ferragamo, Glenfiddich, Godiva, Guess, Hermès, Lacoste, L'Oréal, Montblanc, Rémy Martin, Tommy Hilfiger - to name just a few.

Given the passenger demographic, which includes the wealthiest and most brand-hungry people on the planet, duty-free retailing has naturally become a showcase for innovative and luxurious products many of which are exclusive to the channel.

Whilst duty-free retail occurs throughout numerous segments, including in-flight retail, the vast majority of duty-free sales occur through airports. The indications are, however, that on-board duty-free is likely to be one of the fastest growing channels due to a boom in the luxury cruise market.

In 2011 the Asia Pacific region outperformed Europe in duty free retail sales for the first time since the industry was born over 60 years ago with sales of US$16 billion, up 25.5% on 2010.

Of the $46 billion worth of global duty free retail sales, 35% was generated in the Asia Pacific region, 34% in Europe, 23% in the Americas, 7% in the Middle East and 1% in Africa. Asia's share of the pot has increased steadily over the last 10 years as its economies have experienced extraordinary economic growth.

For more information on the duty-free retailing market, see the latest research: Duty-Free Retailing Market Report

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