Consumers continue to seek quality products at reasonable prices, and duty-free channels remain an attractive option. Expanding the selection of brands/products with distinctive local cultural features, along with enhancing shopping experiences and services, will effectively boost duty-free shops’ appeal and drive consumption.
Diana Shao, Director, China Insights
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Executive summary
- Key issues covered in this Report
- Report scope and definition
- What you need to know
- The global duty-free market has resumed growth, while the Chinese market saw a rebound followed by a decline
- Duty-free shopping continues to attract consumers seeking imported goods
- Key insights on target groups
- Future opportunities in duty-free channels
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Overview of the duty-free retail market
- Global and Chinese duty-free markets
- Global duty-free retail returns to growth and is expected to reach pre-pandemic levels by 2025
- Graph 1: duty-free retail market size, 2017-2025 (estimated)
- The APAC region accounts for half of the global duty-free retail market, but its recovery lags behind that of other regions
- Graph 2: duty-free retail market size, by region, 2017-2025 (est)
- Fragrances and cosmetics contributed 40% to duty-free retail value, but their growth is slow, while the fashion category is growing rapidly
- Graph 3: duty-free retail market size, by category, 2017-2024 (est)
- Avolta (formerly Dufry) has reclaimed its position as the world’s top duty-free retailer, while the ‘China Travel’ trend may benefit China Duty Free Group
- China’s duty-free retail sales rebounded before sliding, weighed down by weak performance in Hainan’s offshore duty-free sector
- Graph 4: value sales of Hainan’s offshore duty-free sector, 2017-2024
- Graph 5: market size of the domestic duty-free retail sector and the proportion of Hainan’s offshore duty-free sales, 2017-2024
- China Duty Free Group leads China’s duty-free sector, but its performance is under pressure in 2024
- Graph 6: China Duty Free Group’s revenue and growth rate, 2020-2024
- Market factors
- The recovery in outbound tourism is lagging behind expectations due to limited resumption of international flights
- Overall consumer participation in outbound tourism is growing slowly, while interest in future outbound travel has slightly declined
- Graph 7: participation rate in outbound leisure travel* over the past 12 months, 2021-2024
- Graph 8: plan to take outbound leisure trips* over the next 12 months, 2024
- Security risks abroad may disrupt or impact the outbound travel market
- The rapid development of the Hainan Free Trade Port will boost duty-free shopping and overall consumption
- International beauty brands remain confident in the long-term growth of Hainan’s duty-free market and are increasing their investment
- The implementation of new policies for downtown duty-free stores will support the growth of the duty-free industry and drive domestic consumption
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Consumer trends in duty-free shopping
- Channels for purchasing imported goods
- Cross-border ecommerce now the main channel for purchasing imported goods, duty-free channels have a slight advantage in expensive categories such as bags
- Graph 9: channels used to purchase imported goods in the past 12 months, 2024
- Authenticity guarantees are the top consideration when buying imported goods online; brand and product coverage is also important
- Graph 10: considerations when purchasing imported goods online, 2024
- The authenticity guarantees of major online channels are accepted; duty-free shops’ online channels have a price advantage
- Graph 11: important factors when purchasing imported goods through online channels, by channel, 2024
- Duty-free consumer categories
- Besides beauty and personal care, food and health supplements are now priority duty-free products
- Graph 12: duty-free goods purchased in the past 12 months, 2024
- Fragrance, beauty and fashion products remain duty-free categories that consumers are willing to purchase in the future
- Graph 13: duty-free goods consumers would like to buy in the next 12 months, 2024
- Make duty-free shopping an integral part of consumers’ outbound travel plans
- Graph 14: duty-free goods consumers would like to buy in the next 12 months, by plan to take outbound trips, 2024
- Outbound travel and overseas shopping destinations
- Hong Kong/Macau is the top destination for outbound travel and shopping among consumers
- Graph 15: countries/regions where duty-free goods were bought in the last 12 months, 2024
- Graph 16: outbound travel destinations of interest in the next 12 months, 2023
- Hong Kong/Macau remains the top choice for future outbound shopping, while interest in shopping in Europe has significantly increased
- Graph 17: countries/regions where duty-free goods were purchased and where consumers want to purchase them in the future, 2024
- Hong Kong/Macau and Europe are the main shopping destinations for luxury fashion items in the future
- Graph 18: purchase of clothing, shoes and accessories (including hats, scarves, belts, sunglasses), 2024
- Graph 19: purchase of jewellery/watches/bags, 2024
- Hong Kong/Macau, Europe and South Korea are top shopping destinations for fragrance and beauty products
- Graph 20: purchase of beauty and personal care products or fragrances/perfumes, 2024
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KEY INSIGHTS ON TARGET GROUPS
- Main consumer groups: individuals aged 30-39 and those with high household income
- Consumers aged 30-39 and those with high household income form the main group for outbound tourism
- Graph 21: plan to take outbound leisure trips* over the next 12 months, 2023-2024
- Graph 22: participated in outbound leisure trips* in the past 12 months, 2023-2024
- For duty-free shopping, consumers aged 30-39 most favour beauty products, perfumes, health supplements and luxury fashion items
- Graph 23: duty-free goods purchased in the past 12 months, by age, 2024
- Graph 24: duty-free goods consumers would like to buy in the next 12 months, by age, 2024
- Women aged 30-39 are the main drivers of purchases, while men’s fashion consumption potential warrants more attention and exploration
- Graph 25: duty-free goods purchased in the past 12 months, by age and gender, 2024
- Consumers aged 30-39 primarily shop overseas in Hong Kong/Macau, Europe and Southeast Asia, with a strong preference for Southeast Asia
- Graph 26: countries/regions where duty-free goods were bought in the last 12 months, by age, 2024
- Graph 27: countries/regions where consumers plan to buy duty-free goods in the next 12 months, by age, 2024
- High-income individuals are keen on purchasing various duty-free goods, with beauty and personal care products, health supplements and fashion items being top choices
- Graph 28: duty-free goods purchased in the past 12 months, by monthly household income, 2024
- Graph 29: duty-free goods consumers would like to buy in the next 12 months, by monthly household income, 2024
- High-income groups mainly shop overseas in Hong Kong/Macao, Southeast Asia and Japan; their future outbound travel/shopping plans lean towards long-haul destinations
- Graph 30: countries/regions where consumers plan to buy duty-free goods in the next 12 months, by monthly household income, 2024
- Graph 31: countries/regions where duty-free goods were bought in the last 12 months, by monthly household income, 2024
- Gen Z with high interest but a limited budget (aged 18-29)
- Gen Z consumers, especially those aged 18-24, are highly interested in outbound travel
- Graph 32: participated in outbound leisure trips* in the past 12 months, by age, 2023-2024
- Graph 33: plans for outbound leisure trips in the next 12 months, by age, 2023-2024
- Gen Z desires outbound trips but has a limited budget
- Graph 34: budget for leisure travels in the next 12 months, 2024
- Gen Z’s top choice for duty-free purchases is electronics
- Graph 35: duty-free goods purchased in the past 12 months, by age, 2024
- Graph 36: duty-free goods consumers would like to buy in the next 12 months, by age, 2024
- Gen Z prefers shopping in South Korea and Japan
- Graph 37: countries/regions where duty-free goods were bought in the last 12 months, by age, 2024
- Graph 38: countries/regions where consumers plan to buy duty-free goods in the next 12 months, by age, 2024
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Future opportunities
- Consumer Trend: Culturally Connected
- Trend Analysis
- Chinese consumers’ recognition of cultural identities and heritage continues to strengthen, and duty-free channels can expand their offerings of products featuring domestic elements
- Graph 39: attitude towards ‘my heritage (eg culture, history) is an important part of my identity’, 2022-2024
- Domestic duty-free channels are expanding their range of products with local cultural features
- Overseas duty-free shops are actively introducing local specialty brands
- Consumer Trend: Experience Is All
- Trend Analysis
- Domestic and international duty-free shops are continuously upgrading the shopping experience
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What we think
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Appendix – methodology and abbreviations
- Methodology
- Abbreviations
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