APAC duty-free market expected to grow fastest, fueled by rising income levels and international travelers

Per latest GlobalData estimates, the global duty-free market retailing market was valued at $49 billion in 2022, its highest level ever as it bounced back from the pandemic impact, and is expected to grow at a CAGR of more than 28% during the period 2020-2026, driven by government initiatives, rising passenger numbers, major global events (for instance global sporting tournaments) and the renewed popularity of cruise trips. Infrastructure investments will also play an important role, particularly airport expansion and space refurbishment, and investments in arrivals duty-free formats. That said, growth will be held in check in the years ahead by the permanent erosion of disposable income from the heightened cost of living impacting demand for air travel. The duty-free market in the APAC region showed strong growth in 2022, as traveler numbers surged in response to the lifting of travel restrictions. To cater for rising demand in the region, many airports in the APAC area are expanding and modernizing, giving duty-free stores greater space that will allow them to attract more customers. The future of APAC duty-free retail is also being shaped by the adoption of technology. The rise in online shopping, mobile payments, and digital marketing are giving businesses new ways to connect with customers and improve the shopping experience.