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.

 Singapore (Taken from TFWA website)

Singapore (Taken from TFWA website)

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.”

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