According to the study, ‘GLOBAL
FASHION DUTY FREE RETAILING, 2017-2022: MARKET & CATEGORY EXPENDITURE AND
FORECASTS, TRENDS, AND COMPETITIVE LANDSCAPE’, major fashion brands
that operate in this segment include Burberry,
Calvin Klein, Ralph Lauren, Hugo Boss, Tommy Hilfiger. Owing to the huge
investment that is involved in coming up with a duty free outlet, only
companies that are very resourceful and possess great financial potential are
able to venture in this segment of retailing.
Global Fashion Duty Free retailing includes the sales of clothing,
footwear, luggage and leather goods which are all duty free. Duty free basically
implies the goods that are exempt from the payment of duty that is required to
be paid on purchase of an article. The global fashion duty free retailing
market has recently reached a huge amount in terms of volume as well as value and
the industry is expected to grow at a modest rate in the coming future. This
increase has been mainly due to certain key factors driving the growth of this
industry.
There are multiple key growth drivers for this industry and these include:
·
Increasing
airport traffic: Major airports all around the world are
witnessing a growth in the average passenger traffic annually. Since, many
showrooms offer duty free fashion products at airports, this industry is
booming corresponding to it.
·
Increasing
brands: Studies suggest that the number of brands
that offer duty free product has been constantly on the rise from the past 5
years. This is due to the fact that big organizations and companies have
realized the demand potential from this segment. This has fuelled the growth of
the duty free market of fashion products.
·
Increasing
retail space openings: The average number of retail
space openings across countries has been growing throughout the last decade.
Since, the number of retail space opening increase, so do the number of brands
that open their outlets not just for selling their products but also for
selling their duty free products.
·
Increasing
duty exemptions: The duty exemptions on products have seen an
upward trend in the recent years. Increasing duty exemptions lowers the price
of new products which automatically drives up the demand for these products.
Region wise trend has been the
rising demand from the Asia – Pacific region. The major reason for growing
trend from this particular region is the rise in tourism industry in Asian
region coupled with rise in airport traffic. This leads to the highest growing
demand from the Asia – Pacific region. Although, the overall industry is led by
European region in terms of value as well as volume, South Korea currently
remains the biggest market duty free fashion products and is expected to remain
the highest growing market for the coming 5 years as well.
In the duty free fashion retailing
segment personal care products such as razors, talcum, shampoo are one’s that
have the highest demand and dominate the market segment. This trend shall
witness no slowdown in the coming years and personal care products shall be the
dominating product category.
While the overall industry is
showing trends of modest growth in the future, there still remain many threats.
All the companies new and existing carefully need to analyse these problems
before making any move. The competition landscape is very tight primarily due
to the increased cost of investment associated with duty free service outlets.
They either cost way too much or the rental price is way too high. All the
companies that hope to enter this segment could profit immensely if they could
surpass this problem related to physical infrastructure.
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