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Shopping in Duty-free Stores - China - September 2018

“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 Research Analyst

This Report looks at the following areas:

  • Expending shopping scenarios and extending of shopping time for more opportunities 
  • Female consumers hold loads of purchasing power
  • Niche brands instead of luxury brands lead the future trend
  • Build a duty-free retail brand like Korean duty-free retailers

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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

                                                                  Shopping in Duty-free Stores - China - September 2018

                                                                  US $4,460.00 (Excl.Tax)