WWD: Duty-Free Retail Industry Faces Challenges
May 12, 2015
SINGAPORE – Sales growth within the duty-free and travel retail segment is slowing down and the ever-evolving desires of the Asian traveler — along with the rise of online shopping — will present even more challenges to the sector, according to industry players here.
While Asia currently holds the largest market share of duty-free sales at 37.6 percent, retailers are seeing a slowdown in growth rates despite the increase of travelers. In 2014, the $62 billion industry had only a 3.5 percent increase in revenues in Asia, a sharp drop from 12.1 percent growth seen in 2013. Tax Free World Association (TFWA) president Erik Juul-Mortensen believes that this is “a cause for concern.”
More than 3,000 representatives attended the 20th annual TFWA conference in Singapore, where speakers tried to anticipate the shifts of a volatile global economy.
“Maintaining the growth we’ve witnessed here in recent years is going to be increasingly challenging,” Juul-Mortensen said to the conference attendants. “This new economic reality, coupled with other major developments in our industry, suggests to me that we have arrived at a watershed point.”