What: Philippe Fontalba, an expert in retail and travel retail, gives his views on the market perspectives in 2024.

Why it is important: Travel retail is increasingly connected to the same expectations than in full price markets: sustainability, digital transformation, product diversification. However, and this does not make things easier, the customer is changing.

The travel retail sector is poised for significant growth, with projections suggesting the global duty-free and travel retail market will expand from USD 75.63 billion in 2024 to USD 121.09 billion by 2029. Asia-Pacific is expected to lead this growth, driven by increasing air travel and rising consumer purchasing power, particularly in China and India. New, affordable travel packages and digital advancements are likely to further stimulate this market.

In the MENA region, countries like Egypt and Saudi Arabia are enhancing their travel retail capabilities, leveraging rich cultural attractions and significant investments in tourism infrastructure. This includes Saudi Arabia's Vision 2030 and Project Travel, which aim to transform the country into a travel retail hub. The demand for premium and luxury items, especially perfumes, remains strong in the Middle East, with Dubai being a key market.

Product diversification continues with an increased offering of fashion, accessories, electronics, and food products within duty-free spaces. Key players include Dufry, Lagardère Travel Retail, DFS Group, Lotte Duty Free, and Flemingo International, who are emphasizing innovative marketing and competitive pricing.

Sustainability has become a critical focus, with initiatives such as eco-friendly packaging and green retail spaces becoming standard. In beauty, demand for luxury cosmetics is growing, with brands like L'Oréal Paris, Estée Lauder, and Chanel Beauty leading the market through innovation.

Digital transformation is reshaping customer interactions, with technologies like Amazon's Just Walk Out enhancing the shopping experience. The expansion of duty-free spaces in airports and seaports, especially in Asia-Pacific, aligns with the overall strategic growth of the sector. Leaders in travel retail are urged to adopt strategies that embrace sustainability, technology, and localized offerings to cater to a diverse and evolving consumer base.

An expert view on the state of Travel Retail