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Partnerships & Agreements, Joint Ventures, and Acquisitions Are Some of the Significant Strategies Adopted by the Market Players in Airport Retailing Market
Airports have traditionally been relying on passenger traffic and airlines for generating revenues. However, with the increasing awareness about various technologies and the changing retail dynamics, the expectations of customers have increased. Currently, retailing is not just limited to downtown shopping malls but has extended to airports as well. To remain competitive, air carriers have to not only sustain their profits, but also keep the air fares as low as possible. As a result, they are emphasizing to diversify their sources of income, which includes non-aeronautical opportunities in travel retail, duty-free & duty-paid shops, and airport lounges. The increasing number of passengers, affordable airline prices, and the global rise of disposable income have also enabled plenty of prospects for duty-free and duty-paid shops to exploit available opportunities. With the growing demand of travel retail, airports are more dependent on retail and food & beverages sales to boost their revenues, where duty-free shops play an important role in maintaining the desired profits. The airport retailing market is projected to be USD 47.81 Billion by 2021, and to grow at a CAGR of 8.5% during the forecast period of 2016 to 2021.
Various vendors prevailing in this market space include, Dufry AG (Switzerland), Legardere Travel Retail (France), Dubai Duty Free (UAE), and DFS Group (Hong Kong). Players in this business sector have adopted different strategies to extend their worldwide presence and expand their market share. Partnerships & agreements, joint ventures, and acquisitions are some of the significant strategies adopted by the market players to accomplish development in the airport retailing market. Dufry AG (Switzerland), Dubai Duty Free (UAE), and Autogrill (Italy) have adopted these strategies to expand their product portfolio.
Dufry AG (Switzerland), is a global travel retailer and operates across 58 countries with 1,700 shops located at airports, cruise liners, seaports, and other tourist locations. The company has been focusing on famous tourist destinations and most accessible airports. The company has developed a strong portfolio of items, such as perfumes, and cosmetics, among others. Dufry provides its customers with brands from more than 1,500 suppliers. The company has global presence with its corporate structure organized in five divisions. Dufry has adopted a customer-centric approach to understand the requirements of local customers and customize its products and service offerings accordingly.
Dubai Duty Free (UAE) is a leading airport retailer in the world. This company currently operates around 26,000 square meters of retail space at Dubai International Airport and 2,500 square meters at Al Maktoum International (AMI) Airport. The company is engaged in developing, licensing, and supporting a wide range of software products and services. The company contributed a share of around 50% to the airport retailing market in the Middle East. The company is also involved in promoting Dubai through sporting events, like the Dubai Duty Free Tennis Championship. These events organized by the company help in boosting tourism, which in turn results in increased footfall at Dubai International Airport. The company is also developing and expanding its business at the Al Maktoum International Airport, which is anticipated to be the world’s largest airport in the near future with passenger capacity of 160 million.
Airport Retailing Market by Type (Direct Retailer, Department Store, Specialty Retailer, Supermarkets), Airport Size (Large, Medium, Small), Category (Liquor & Tobacco, Perfumes & Cosmetics, Fashion & Accessories) - Global Forecast to 2021
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