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China Shopping in Duty-free Stores Market Report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Shopping in Duty-free Stores market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

The report discusses the duty-free shopping related topics and attitudes of preference of Chinese consumers towards duty-free shopping. The Report looks at consumers’ duty-free shopping behaviours, channel choices and product preference, as well as key competitors, strategies and future opportunities in duty-free retailing industry.

The report covers regularly purchased duty-free product categories, including: cosmetics and skin care products, clothing, footwear, accessories, food, jewellery and watches, personal electronics, alcoholic drink, tobacco products, leather goods, small home electrical appliances and luggage and travel goods.The report also covers duty-free channels, including: duty-free stores at airports/ports, duty-free shops in cities, Daigou, on airplanes/cruises and duty-free shops’ websites/apps.

What you need to know

Outbound travelling has become ordinary for Chinese consumers and duty-free shopping has been one of the key spending points for Chinese outbound travellers. Import tax regulation remains a key influential factor on the most popular buying categories and on-site duty-free venues such as airport and in-city retail stores are still the most popular locations. The “traditions” of duty-free shopping still exist.

As scenario-driven as duty-free shopping is, the duty-free retailing experience is no longer limited to outbound travelling only. Consumers have brand new ways to access duty-free products via channels such as Daigou and duty-free retailing apps to fulfil their needs for duty-free products. Duty-free retailers can not only benefit from the growing number of outbound travellers, but also expansion of their business via improvement of the consuming experience offline and online.

Expert analysis from a specialist in the field

Written by Jaslien Chen, a leading analyst in the Retail sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Consuming scenario’s extension and expansion determines the success of duty-free retailers. Consumers are no longer only satisfied by the on–site shopping experiences; on-site enjoyment and off-site services will become important to drive purchase. Moreover, duty-free retailers need to properly position brand as well as set clear marketing strategy to build better consumer awareness and loyalty Jaslien Chen
Senior Retail Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • The consumer
              • Duty-free shopping reaching more consumers
                • Figure 1: Penetration of consumers who have done outbound travel in the last 12 months, by selected demographics, May 2018
              • Consumers are willing to spend more on duty-free shopping
                • Figure 2: Spending intention on different categories, May 2018
              • Tax rate determines popularity of purchasing categories
                • Figure 3: Penetration of purchase on different product categories – Outbound travellers vs non-outbound travellers, May 2018
              • Outbound travel hubs still dominate but online channels are catching up
                • Figure 4: Penetration of consumers duty-free shopping location – Outbound travellers vs non-outbound travellers, by selected demographics, May 2018
              • Consumers prefer Asian duty-free retailers for geographic convenience and geo-resonance
                • Figure 5: Top 5 favoured duty-free shopping country, May 2018
              • Consumers hold different perceptions towards brands from different countries
                • Figure 6: Attributes associated with brands from different countries, Jun 2018
              • Factors directly related with products drive sales of duty-free retailing
                • Figure 7: Penetration of factors for consumers to choose a duty-free store, May 2018
              • What we think
              • Issues and Insights

                • Expending shopping scenarios and extending of shopping time for more opportunities
                  • The facts
                    • The implications
                      • Female consumers hold loads of purchasing power
                        • The facts
                          • The implications
                            • Figure 8: Chabot Armagnac Single Cask 1998 Vintage launched in Hong Kong International airport, July August
                            • Figure 9: Lotte and L’Oreal event, August 2018
                          • Niche brands instead of luxury brands lead the future trend
                            • The facts
                              • The implications
                                • Build a duty-free retail brand like Korean duty-free retailers
                                  • The facts
                                    • The implications
                                      • Figure 10: Lotte World’s entrance and commercial area display
                                  • The Market – What You Need to Know

                                    • Uprising with development of travel industry
                                      • The industry is easily impacted by macro economy
                                        • Asian competitors are reshaping the landscape
                                        • Market Overview

                                          • Market Size

                                              • Figure 11: Travel and duty-free retail sales value in USD worldwide, 2014-17
                                          • Key Players – What You Need to Know

                                            • Traditional industry leaders still dominate
                                              • Asian retailers empower the global landscape
                                                • “New” and “old” business acts will be running parallel in the future
                                                • Major Competitors

                                                    • Figure 12: Global duty-free market share, 2017
                                                    • Figure 13: Top 5 duty-free and travel retailers’ sales in USD billion worldwide, 2017
                                                • Competitive Strategies

                                                  • Merging and acquisition
                                                    • Branding and marketing
                                                      • Figure 14: Lotte star avenue display
                                                    • Omni-channel strategy to enlarge consuming
                                                      • Figure 15: Lotte online ordering app
                                                      • Figure 16: Consumers queueing outside of CNSC in-city duty-free store in Shanghai, August 2016
                                                  • The Consumer – What You Need to Know

                                                    • Outbound travellers and non-outbound traveller are all involved
                                                      • Consumers are still willing to spend but spend smartly
                                                        • Consumers buying not only for tax refund
                                                          • Asian retailers become new leaders
                                                          • Relationship between Outbound Travel and Duty-free Shopping

                                                            • Most consumers have undertaken outbound travel
                                                              • Figure 17: Penetration of consumers who have done outbound travel in the last 12 months, by selected demographics, May 2018
                                                              • Figure 18: Penetration of consumers who have done outbound travel in the last 12 months, by selected demographics, May 2018
                                                            • Outbound travel drives sales of duty-free retailing but non outbound travellers are buyers as well
                                                              • Figure 19: Purchase channels of duty-free products, May 2018
                                                              • Figure 20: Purchase channels of duty-free products, by selected demographics, May 2018
                                                          • Spending Intention

                                                            • Consumers intend to spend more on duty-free purchasing related categories
                                                              • Figure 21: Spending intention on different categories, May 2018
                                                              • Figure 22: Consumers who spent more on different categories, by selected demographics, May 2018
                                                            • Duty-free purchase drives outbound travel spending
                                                              • Figure 23: Spending intention on different categories – Outbound travel duty-free buyers, May 2018
                                                            • Duty-free purchasing intentions lead by travel behaviours
                                                              • Figure 24: Spending intention on different categories, by selected demographics, May 2018
                                                          • Most Purchased Duty-free Products

                                                            • Tax remains a key factor for consumers to consider duty-free shopping
                                                              • Figure 25: Penetration of purchase on different product categories, May 2018
                                                            • Differences between travellers vs non-travellers
                                                              • Figure 26: Penetration of purchase on different product categories between outbound travellers and non-outbound travellers, May 2018
                                                            • Age, gender and city differs
                                                              • Figure 27: Penetration of purchase on cosmetics and skin care category among female consumers, by selected demographics, May 2018
                                                              • Figure 28: Penetration of purchase on personal electronics among male consumers, by selected demographics, May 2018
                                                              • Figure 29: Penetration of purchase on alcoholic drinks and tobacco products, by selected demographics, May 2018
                                                              • Figure 30: Penetration of purchase on categories which tier 2 and tier 3 city consumers purchase more, by selected demographics, May 2018
                                                          • Duty-free Shopping Scenarios

                                                            • Duty-free shopping remains specifically scenario-driven for outbound travellers
                                                              • Figure 31: Penetration of duty-free shopping channels – Outbound travellers, May 2018
                                                              • Figure 32: Penetration of purchase of different product categories – Outbound travellers buy at transportation hubs VS buy at inner city shops, May 2018
                                                            • Online service empowers non-outbound travellers for duty-free purchasing
                                                              • Figure 33: Penetration of top 3 duty-free purchase channels – Non-outbound travellers, May 2018
                                                              • Figure 34: Penetration of purchase on duty-free products categories – Non-outbound travellers, by selected demographics, May 2018
                                                              • Figure 35: Penetration of duty-free purchase channels– Non outbound travellers, May 2018
                                                          • Shopping Location Preference of Consumers

                                                            • Asian duty-free retailers have an outstanding performance
                                                                • Figure 36: Top 5 favoured duty-free shopping country, May 2018
                                                                • Figure 37: Top 3 favoured duty-free shopping country, by selected demographics, May 2018
                                                              • Korean duty-free retailers’ eminence
                                                                  • Figure 38: Penetration of favourite duty-free retailers, May 2018
                                                                  • Figure 39: Penetration of top-5 favoured duty-free retailers, by selected demographics, May 2018
                                                              • Perceptions of Brands from Different Countries

                                                                • Perception on brands of different countries remains the same
                                                                  • Figure 40: Attributes associated with brands from different countries, Jun 2018
                                                                • Key factors driving brand image in most favoured duty-free countries
                                                                  • Figure 41: Top 3 perception of attributes associated with brands from Korea, China and France, May 2018
                                                                  • Figure 42: Perception of trendy associated with brands from Korea, by selected demographics, May 2018
                                                                  • Figure 43: Perception of sense of luxury associated with brands from France, by selected demographics, May 2018
                                                                  • Figure 44: Penetration of purchase on different product categories, by selected demographics, May 2018
                                                              • Reason to Do Shopping via Duty-free Retail Venues

                                                                • Product-oriented factors are key values that consumers take away from duty-free retailing
                                                                  • Figure 45: Penetration of factors for consumers to choose a duty-free store, May 2018
                                                                • Outbound travellers and non-outbound travellers care different factors
                                                                  • Figure 46: Penetration of factors for consumers to choose a duty-free retailer, May 2018
                                                                • Shopping experience drives duty-free sales for high-income consumers
                                                                  • Figure 47: Penetration of factors for consumers to choose a duty-free retailer – Comfortable shopping environment, by selected demographics, May 2018
                                                              • Meet the Mintropolitans

                                                                • Product variety and in-store comfort affect Mintropolitans more
                                                                  • Figure 48: Factors that influence consumers to choose a duty-free store, MAY 2018
                                                                • Mintropolitans enjoy bringing home gifts with cultural meaning and character
                                                                  • Figure 49: Spending intention on different categories, May 2018
                                                              • Appendix – Market Size

                                                                  • Figure 50: Travel and duty-free retail sales value in USD worldwide, 2014-17
                                                              • Appendix – Methodology and Abbreviations

                                                                • Methodology
                                                                  • Abbreviations