According to the study, ‘GLOBAL FASHION DUTY FREE RETAILING, 2017-2022: MARKET & CATEGORY EXPENDITURE AND FORECASTS, TRENDS, AND COMPETITIVE LANDSCAPE’, major fashion brands that operate in this segment include Burberry, Calvin Klein, Ralph Lauren, Hugo Boss, Tommy Hilfiger. Owing to the huge investment that is involved in coming up with a duty free outlet, only companies that are very resourceful and possess great financial potential are able to venture in this segment of retailing.
Global Fashion Duty Free retailing includes the sales of clothing, footwear, luggage and leather goods which are all duty free. Duty free basically implies the goods that are exempt from the payment of duty that is required to be paid on purchase of an article. The global fashion duty free retailing market has recently reached a huge amount in terms of volume as well as value and the industry is expected to grow at a modest rate in the coming future. This increase has been mainly due to certain key factors driving the growth of this industry.
There are multiple key growth drivers for this industry and these include:
- Increasing airport traffic: Major airports all around the world are witnessing a growth in the average passenger traffic annually. Since, many showrooms offer duty free fashion products at airports, this industry is booming corresponding to it.
- Increasing brands: Studies suggest that the number of brands that offer duty free product has been constantly on the rise from the past 5 years. This is due to the fact that big organizations and companies have realized the demand potential from this segment. This has fuelled the growth of the duty free market of fashion products.
- Increasing retail space openings: The average number of retail space openings across countries has been growing throughout the last decade. Since, the number of retail space opening increase, so do the number of brands that open their outlets not just for selling their products but also for selling their duty free products.
- Increasing duty exemptions: The duty exemptions on products have seen an upward trend in the recent years. Increasing duty exemptions lowers the price of new products which automatically drives up the demand for these products.
Region wise trend has been the rising demand from the Asia – Pacific region. The major reason for growing trend from this particular region is the rise in tourism industry in Asian region coupled with rise in airport traffic. This leads to the highest growing demand from the Asia – Pacific region. Although, the overall industry is led by European region in terms of value as well as volume, South Korea currently remains the biggest market duty free fashion products and is expected to remain the highest growing market for the coming 5 years as well.
In the duty free fashion retailing segment personal care products such as razors, talcum, shampoo are one’s that have the highest demand and dominate the market segment. This trend shall witness no slowdown in the coming years and personal care products shall be the dominating product category.
While the overall industry is showing trends of modest growth in the future, there still remain many threats. All the companies new and existing carefully need to analyse these problems before making any move. The competition landscape is very tight primarily due to the increased cost of investment associated with duty free service outlets. They either cost way too much or the rental price is way too high. All the companies that hope to enter this segment could profit immensely if they could surpass this problem related to physical infrastructure.
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