Business Opportunities, Chain Structure Analysis and Industry Development Overview to 2030 – ManufactureLink

the global airport retail market the size should reach 51.4 billion USD by 2030 from 19.9 billion USD in 2021, growing at a CAGR of 12.6% from 2022 to 2030. The global airport retail market has been growing rapidly over the past few years owing to the increase in the propensity of people to traveling and exploring unique vacation destinations. Market growth is still driven by soaring disposable income and improving living standards. An increase in the number of High Net Worth Individuals (HNIs) in emerging markets is further propelling the growth of the market.

Increase in tourism promotion, changes in lifestyle and increased accessibility of transportation facilities are all factors that are expected to boost the growth of the airport retail market. Technological advancements, for example, have made it easier to book hotels and transportation through online portals, thereby driving the growth of the market. Additionally, consumer inclination towards luxury lifestyle is one of the factors driving the growth of the airport retail market.

However, the implementation of strict baggage rules changes the shopping behavior of customers, which hinders the sale of duty-free and other products at the airport premises, thus hindering the development of the retail market in airport. On the contrary, untapped countries in Asia-Pacific and MEA region have huge growth prospects in the coming years. For example, strengthening economy in several MEA countries is driving the growth of the market. Additionally, an increase in the number of millennials is expected to drive the growth of the airport retail market.

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Global Airport Retail Market Definition

Retail at the airport refers to several retail services such as jewelry, books and magazines, gifts and crafts, clothing and accessories, convenience stores and perfumes on the airport premises to provide convenience increased to travellers. Additionally, airport retail offers a wide range of merchandise and is a relatively easy choice for travelers.

covid19 Global Airport Retail Market Impact

The COVID-19 pandemic has affected every industry on the planet. The tourism industry has been hit hard worldwide, affecting related industries such as travel agencies, hotels, tour operators and various modes of transport. About 90% of the world’s population has adapted to their new way of life due to several travel restrictions, while the rest have stayed home for fear of the virus. As a result, the tourism industry came to a halt. The World Travel and Tourism Council (WTCC) published an article in August 2020 estimating that the COVID-19 pandemic will cost the tourism industry nearly $25 billion in revenue and almost 100 million jobs in the world. The coronavirus outbreak has impacted airport retail stores as well as the tourism industry.

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Global airport retail market dynamics

Drivers: Increase in disposable income

The two main factors driving the growth of the market are an improving economy and an increase in disposable income. The global economy has come to a standstill following the 2009 economic crisis in Europe and the economic crisis in China. This economic crisis has affected almost every country on the planet. A strong recovery from the crisis, on the other hand, has translated into strong economic growth, especially in developing countries. As a result, the disposable income of the middle income groups has increased, leading to an increase in the middle class population. Additionally, disposable income in Europe and Asia-Pacific has increased significantly, fueling the expansion of the airport retail market.

Constraints: Strict baggage rules

Luggage weight limitation has restricted the market growth over the forecast period. For example, India’s national carrier, Air India, and its low-cost airline have limited the weight of hand luggage carried by passengers arriving from the United Arab Emirates. Free carry-on baggage allowances are limited to 8kg for Air India and 7kg for its low-cost airline Air India Express, including duty-free items. Turkish Airlines does not allow more than 8 kg of handbags, while luggage is limited to 32 kg. Lufthansa allows its passengers to follow a baggage allowance of no more than 32-40 kg. Due to these restrictions, people are trying to buy the limited stock of gifts and alcohol in airport retail stores. In addition, the buying behavior of customers is changing, owing to the application of strict baggage rules, which hampers the sales of duty-free and other products at airport premises, thereby limiting the growth of the market for airport retail.

Segmentation of the global airport retail market

The study categorizes the airport retail market based on product, airport size, and distribution channel regionally and globally..

By Product Perspective (Sales/Revenue, USD million, 20172030)

  • Alcohols & Tobacco
  • Perfumes & Cosmetics
  • Fashion Accessories
  • Food and drinks
  • Others

By airport size (Sales/Revenue, USD million, 20172030)

  • big airport
  • Average airport
  • small airport

By distribution channel Perspectives (Sales/Revenue, USD millions, 20172030)

  • Direct retailer
  • Grocery store
  • Specialized retailer
  • Big store

Outlook by region (Sales/Revenue, USD millions, 20172030)

  • North America (United States, Canada, Mexico)
  • South America (Brazil, Argentina, Colombia, Peru, Rest of Latin America)
  • Europe (Germany, Italy, France, United Kingdom, Spain, Poland, Russia, Slovenia, Slovakia, Hungary, Czech Republic, Belgium, Netherlands, Norway, Sweden, Denmark, Rest of Europe)
  • Asia Pacific (China, Japan, India, South Korea, Indonesia, Malaysia, Thailand, Vietnam, Myanmar, Cambodia, Philippines, Singapore, Australia and New Zealand, Rest of Asia Pacific)
  • The Middle East and Africa (Saudi Arabia, United Arab Emirates, South Africa, North Africa, Rest of MEA)

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The perfumes & cosmetics segment expected to account for the largest market share, by product type

By product type, the market is categorized into Alcohol & Tobacco, Perfumes & Cosmetics, Fashion & Accessories, Food & Beverages, and others.. In 2021, The perfumes and cosmetics segment was the largest contributor to the market, with 39.5% of the global airport retail market share. Spirits such as whiskey, aperitif, champagne, tequila, armagnac, rum, beer and wine are available at airport retail stores.

The consumption of wines, especially luxury wines, and spirits, has increased sharply in recent years. With an increase in the number of middle-aged consumers between 35 and 55 years old prefer wine. This should encourage liquor manufacturers to launch special duty-free and retail products. Additionally, alcohol producers are launching regional and international flavors of various wines, beers, and whiskeys, which entice consumers to try new flavors, thus helping the market grow. For tobacco products, consumers are more likely to purchase international editions of cigars, cigarettes and regional tobacco products. Consumers obtain a wide variety of cigarettes from airport retail stores at lower prices than the open market, as they are duty free.

Asia Pacific represents the highest CAGR over the forecast period

Regionally, the market is segmented into North America, AsiaPacific, Europe, South America, Middle East and Africa. Globally, Asia-Pacific is expected to hold the highest CAGR of 13.7% in the global airport retail market over the forecast period. Asia-Pacific in airport retail market is studied across China, Thailand, Japan, India, Australia, and South Korea. Asia-Pacific is experiencing the fastest growth due to improved living standards, increased disposable income, and growth in the tourism industry.

After Asia-Pacific, Europe is the fastest growing region with a CAGR of 11.9% in the global airport retail market. North American airports are investing heavily in revenue per visitor analytics by providing an enhanced shopping experience with facilities such as boarding, accommodation, catering, parking and advertising. Additionally, focusing on promotional activities such as campaigns, digital advertising, events, and press activities fuels duty-free shopping and product visibility.

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Main market players

Leading players profiled in the Airport Retail Market report are Dubai Duty-Free, Airport Retail Group LLC, DFS Group Ltd., China Duty-Free Group Co., Ltd., King Power International, Shilla Duty-Free, Dufry AG, Japan Airport Terminal Co., Ltd., Gebr. Heinemann SE & Co. KG and Flemingo International.

A study of major players in the airport retail market analyzes the best winning strategies. A thorough review of recent developments and growth charts of various companies helps in understanding their growth strategies and potential impact on the market. Here are the key strategies deduced from a review of recent developments among the major players:

  • In August 2020, DFS Group acquired a 22% stake in Shenzhen Duty-Free Ecommerce Co, which is majority-owned by Shenzhen Duty-Free Group to provide customers in China with luxury goods from some of the world’s best-known brands. .
  • In November 2020, China Duty-Free Group partnered with Design Solution to redevelop the commercial planning and design of the international departure lounge at Beijing Capital International Airport, and China Duty-Free Group led the operations of retail.
  • In October 2020, Dufry formed a joint venture with the Alibaba Group to partner in the Chinese travel retail markets.
  • In August 2020, Republic Services Inc.. entered into a partnership with Aria Energy based in the United States.S, which deals with the management of renewable energies. The partnership aimed to purify biogas from landfills to RNG (renewable natural gas).

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