Chinese consumers' demand for duty-free shopping is evolving towards a mix of value and experience. Beyond ensuring product quality and value for money, brands and retailers can meet rising expectations by creating culturally distinctive, emotionally engaging environments supported by high-quality, professional service.
Laura Liu, Senior Research Analyst – Retail & Home Appliances, China
Market Definitions
This Report examines the duty-free industry, as well as consumer behaviour and attitudes toward purchasing duty-free goods.
The duty-free industry is a core segment of travel retail, comprising businesses authorised by specific countries and regions to operate stores on transport vehicles, at ports or in city centres, allowing inbound and outbound travellers to purchase duty-free goods.
Duty-free goods are items exempt from customs duties, consumption taxes and value-added taxes, typically imported products. The range of duty-free goods varies by country or region (for instance, duty-free shopping is not available between EU member states). Duty-free policies also define the maximum quantity of items travellers can bring into their destination country, known as the ‘Duty-Free Allowance’. Hainan Free Trade Port (海南自贸港) offers the world’s highest duty-free shopping quota for offshore travellers at RMB100,000 (approximately $14,000) per person annually.
The main categories of duty-free goods include cosmetics, fragrances, electronics, bags, jewellery, watches, clothing and accessories, food, toys, tobacco and alcohol.
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Executive summary
- Key issues in this Report
- Definitions
- What you need to know
- The market
- Consumer overview
- Key insights into target groups
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The market
- Global
- Global duty-free retail market continues to grow; recovery to pre-pandemic levels will take time
- Graph 1: duty-free retail market size, 2018-2026 (estimated)
- Asia-Pacific remains the largest market, but recovery is slower than other regions
- Graph 2: share of the duty-free retail market, by region, 2018-24 (forecast)
- Fragrances, cosmetics still contribute highest value sales but growth is slow
- Graph 3: duty-free retail market size, by category, 2018-2024 (est)
- Global duty-free retail landscape largely unchanged; CDF’s share is declining
- China
- Gradual recovery in outbound tourism drives growth in duty-free shopping
- Leading player CDF continues to face performance pressure
- Graph 4: China Duty Free Group’s revenue and growth rate, 2020-25
- Graph 5: cross-border ecommerce imports and exports, 2020-24
- Policy drives growth in the duty-free sector
- At the same time, inbound tourism is powering domestic duty-free spending
- New measures for inbound foreign tourists allow on-the-spot tax refunds
- Market trends
- Rapid integration of online and physical channels
- First-store economy continues to gain momentum in duty-free sector
- Expanding the boundaries of duty-free plus: how cultural tourism enhances the in-person shopping experience
- Emerging tourism format: expand duty-free shopping channels on cruise ships
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Consumer overview
- Duty-free consumer categories
- Food remains the most popular category; electronics on the rise; grooming and personal care sales decline
- Graph 6: duty-free goods purchased in the last 12 months, 2024-25
- Duty-free, now with added state subsidies, sparks consumer enthusiasm for electronics
- Consumers still willing to buy fragrances, beauty and fashion products in the future
- Graph 7: duty-free goods consumers would like to buy in the next 12 months, 2025
- Broad product range is top factor driving purchases
- Graph 8: types of duty-free goods purchased in the last 12 months, 2025
- Graph 9: types of duty-free goods consumers would like to buy in the next 12 months, 2025
- Product purchase channels
- Duty free store apps, mini programs win highest level of consumer trust
- Graph 10: duty-free and tax-refundable goods, by purchase channel, 2025
- Guaranteed authenticity, product variety are key reasons for shopping online
- Graph 11: perceptions of online duty-free shopping channels, 2025
- Physical retailers must elevate the shopping experience across multiple touchpoints to reignite consumer interest, drive spending recovery
- Graph 12: perceptions of physical duty-free shopping channels, 2025
- Future travel/shopping destinations and attitudes
- Hong Kong, Macau and Taiwan still top choices for future outbound shoppers; Hainan ranks second ahead of Europe and South Korea
- Hong Kong, Macau and Taiwan still top choices for future outbound shoppers; Hainan ranks second, ahead of Europe and South Korea
- Graph 13: duty-free shopping destinations in the next 12 months, 2025
- Integrate duty-free shopping with local culture to meet demand for cultural travel experiences
- Graph 14: travel/shopping preferences, 2025
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Key insights into target groups
- Women – connect emotionally with destinations through local culture
- Consumer profiles and keys to brand success
- Women show clear tendency towards spending on self-indulgence, health
- Graph 15: duty-free goods purchased in the past 12 months, by gender, 2025
- Cultural experiences while shopping are key driver of women’s spending
- Graph 16: attitudes around travel/shopping, by gender, 2025
- Graph 17: appealing features of in-person venues, by gender, 2025
- Culturally relevant toys/dolls elicit stronger emotional responses
- Men – seek status and identity through exclusivity
- Consumer profiles and keys to brand success
- Own use or gifting? Men’s priorities differ
- Gen Z men believe in sophisticated skincare for men; are keen to buy BPC products for their own use
- Graph 18: duty-free goods purchased in the last 12 months – BPC, by age and gender, 2025
- Older men prioritise presentability, sense of occasion when gifting BPC products
- Graph 19: purchase plans for duty-free goods in the next 12 months – BPC, by age and gender, 2025
- Leverage scarcity: attract male travellers with rare finds
- Graph 20: attitudes around travel/shopping, by gender, 2025
- Boost appeal with locale-specific, limited-edition duty-free products that reinforce social identity
- Older shoppers* – tailor design and services to remove barriers to consumption
- Consumer profiles and keys to brand success
- Unfamiliarity with duty-free channels suppresses spending potential of older consumers
- Graph 21: worries about ageing, by country, 2024
- Graph 22: impressions of duty-free/tax refundable shopping channels – none of the above/I don’t know, by age, 2025
- Focus on dietary supplements: healthy eating is a cornerstone of older consumers’ lives
- Graph 23: duty-free goods purchased by 50-59s in the last 12 months, 2025
- Older travellers view immersive cultural experiences as a luxury highlight
- Graph 24: essential features of an ideal luxury holiday, by age, 2024
- High-income consumers – boost user loyalty through in-person experiences and service
- Consumer profiles and keys to brand success
- Outbound tourism will continue to be driven by high-income consumers in the short term
- Graph 25: outbound leisure trips planned in the next three years, by monthly household income, 2025
- High-income travellers favour duty-free destinations that deliver more than just discounts
- Graph 26: duty-free shopping destinations in the next 12 months, by monthly household income, 2025
- Blend the convenience of online shopping with in-person immersive experiences that appeal to high-income consumers
- Graph 27: duty-free shopping channels, by monthly household income, 2025
- Graph 28: perceptions of physical duty-free/tax refundable shopping channels – Hainan offshore duty-free shops, by monthly household income, 2025
- Brands, retailers can win over high-income consumers by enhancing in-store service
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Appendix – methodology and abbreviations
- Methodology
- Abbreviations
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