FOCUS
It has been observed that luxury
wines and spirits are highly preferred by
the international passengers, which leads
to the growth of the market.
Juul-Mortensen noted that TFWA
is seeing strong growth in sales of
fragrances and cosmetics in the Asia-
Pacific market. “The Generation
Research figures show year-on-year sales
of fragrances and cosmetics in the region
increased 19.9% in 2017, growing to
US$14 billion. Wines and spirits have
also proven popular shopping basket
items, with sales up 12.9% to US$3.9
billion over the same period,” he said.
Fashion and accessories were also
strong sales performers among Asia-
Pacific passengers, registering an increase
of 6.2% to US$4.5 billion. Similarly,
travellers spending on watches, jewellery
and fine writing increased by 7.7% to
US$2.6 billion in the region.
It is noted that some of the leading
beauty companies such as Estee Lauder,
L’Oréal, Rituals Cosmetics and Revlon
are expanding their businesses by
opening outlets at every international
airport with an exclusive and wide range
of fragrances and skincare products.
Where are travellers
shopping?
When it comes to airports, it is common
to see the hubs stepping up their
innovative retail campaigns to deliver
a rewarding shopping experience and
encourage spending among passengers.
For example, Singapore’s Changi Airport
makes one shopper a millionaire every
year with its ‘Be a Changi Millionaire’
programme. The anchor promotion has
crowned eight millionaires since 2010.
Additionally, iShopChangi — the
airport’s e-commerce portal — offers
passengers the convenience of purchasing
online between 30 days and 18 hours
before their departure flights, and
picking up their buys at any terminal.
Collection-on-arrival is also available for
cosmetics and perfumes, as well as wines
and spirits.
With more than 14,000 items from
over 600 brands on sale, the portal
recorded a 60% year-on-year growth for
online sales last year with beauty and
electronics emerging as the top product
categories.
Changi Airport Group (CAG)
revealed that retail is an important
part of Changi Airport’s operations,
contributing to about half of CAG’s total
revenue. With 400 retail and service
stores and 140 F&B outlets across
Changi’s four terminals, the airport
logged more than S$2.5 billion (US$1.8
billion) in retail sales — a new all-time
record — with more than 57 million
transactions last year.
In 2016, airports accounted for
the maximum market revenue and it
is projected to grow at a CAGR of 9%
during the forecast period, according
to Allied Market Research. However,
retailers should not overlook other
important travel retail locations besides
airports. “A growing number of Asian
passengers are seeking different travel
experiences, which is leading to renewed
interest in retail locations in addition
to airports, such as ferries and cruises,”
Juul-Mortensen opined.
He observed that travel retail
brands are recognising this and have
been expanding their remit into newer
markets such as China, where the cruise
sector is now expected to rise to US$76
billion by 2019. “We are also seeing
cruise companies launching ships into
home ports in places such as Singapore
and Hong Kong to meet demand from a
new wave of younger passengers.
“In addition to airports, ferry and
cruise lines in international traffic in
several Asia-Pacific countries also have
a number of downtown duty-free stores
for travellers who want to shop in town
as part of their stay,” he said.
Additionally, downtown duty-free
stores offer a wealth of products that
are in demand by travellers and foreign
visitors, and shoppers are able to spend
time to browse and shop at their leisure
there. Travel retail in downtown and
hotel shops is expected to grow at the
highest CAGR of 9.4% from 2017-
2023, Allied Market Research reported.
Future of travel retail
The report went on to say that key
players in travel retail industry focus
The travel retail market is set to
grow to US$85 billion in 2020,
according to Generation Research,
which specialises in analysing and
documenting the global duty-free
and travel retail market.
Singapore’s Changi Airport makes one shopper a millionaire every year with its ‘Be a Changi
Millionaire’ programme.
Retail Asia August 2018
17