According to the report analysis, ‘Duty Free Retailing In Europe, 2017-2022: Market & Category Expenditure And Forecasts, Trends, And Competive Landscape’ suggests that Europe is the second largest duty free market, supported by its rich heritage and its position as a large tourist region. Moreover, its emergence as the most preferred tourist region for Chinese travelers and UK’s exit from the EU drives the duty free sales further in the region. The decline in duty free sales in Europe during 2012-2017 is largely due to the terrorist attacks in the region, which deterred tourists from visiting the region. The higher growth rate in the European duty free market during 2017-2022 will attributed to the reviving of tourists visit, growing Chinese spending in the region, growing UK duty free sales on the back of rising traffic post Brexit, and opening of new duty free space in the region.
Duty free retail is a unique selling channel in which exemption is allowed on the national taxes and duties on the products which are sold to travelers. Most importantly the duty free retail shops are opened to cater more and more international tourists and travelers and it is provide an alternative solution to meet passenger’s demand. Whereas, the duty free retail outlets are most found on the sea ports, in the international zone of international airports and train stations therefore, duty free retail outlets are not opened or available on the roads. The goods which are to be sold on the duty free retail outlets vary by jurisdiction, the process of calculating the duty or refunding the duty component and how they can be sold or which are to be sold. In addition, as the demand for tourism is increasing significantly it will drive landscape of the duty free retail even more.
The products which are available on the duty free retail outlets are the clothing, footwear, jewelry, watches and accessories, luggage and leather goods and others. However, the personal care is the largest and fastest-growing market in the duty free sales in Europe. Moreover, some EU territories charge tax on tobaccos and liquors is lower than in other EU countries due to which the prices still seem competitive and look like duty-free prices. Moreover, the duty-free retail market is segmented on the basis of product, location and geography. With the establishment of new airport terminals and vibrant retail spaces as retail contributes substantial share in the non-aeronautical income, thus duty free retail shops play vital role in modern airport terminals. But there is one barrier in the growth of this market that is a communication gap between the seller and buyer. Additionally, the travelers who are wealthier in nature and having a little knowledge about the language of the host country will always drive the growth of this market. Not only has this, smart airport initiatives across the globe are also expected to aid the growth of duty-free retailing in the coming years over the next decades with the significant increase in the tourism and development in the economic conditions.
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Ankur Gupta, Head Marketing & Communications