In this article, we will discuss the 10 Biggest Duty Free Companies in the World. You can skip our detailed industry analysis and go directly to the 5 Biggest Duty Free Companies in the World.
One of the worst affected industries after the outbreak of the COVID-19 pandemic was the tourism industry. Some countries imposed outright travel restrictions to prevent the spread of the virus, while others took a measured approach in imposing intermittent lockdowns to contain the pandemic. In 2020, the tourism industry lost 62 million jobs worldwide, leaving the total number of people employed at 271 million. The effect of coronavirus was visible in the retail sales of some of the world’s leading airports.
However, things improved in 2021 as countries started moving towards a more normal environment as shutdowns were lifted across the globe. The travel and tourism industry's share in the global GDP went up by $1 trillion in 2021, an increase of 21.7% as compared with 2020. The businesses associated with the tourism sector also saw a boost, including duty free retail stores.
The surge in tourism along with the rising urbanization and social developments are anticipated to fuel market expansion. Furthermore, the improvement in economic conditions and increment of discretionary income of middle-class groups paired with technological advancements are creating even more opportunities for the duty free market to grow. The credit for this goes to the ease of availing transportation, booking hotels, and acquiring other necessities through online portals.
An Analysis of the Duty Free Industry
Duty free retail is a key revenue generator within the aviation and tourism industry. There are numerous reasons why people love shopping in duty free stores. The most obvious reason is the discounted prices that are offered at these stores. However, many consumers also love shopping in duty free stores because they want to collect a souvenir from their trip. This is why duty-free shops are now an integral part of the tourism industry.
The duty free retail market was valued at $35.8 billion in 2021. As the world recovers from the adverse impacts of COVID-19 shutdowns, the duty free retail market is forecasted to grow at a healthy pace at a CAGR of 9.17% during 2022-2029, increasing in value from $39.08 billion in 2022 to $72.3 billion by 2029.
Now that companies are opting for technological features to improve the customer shopping experience, this can give a huge push to the global duty free market. One such example of technology is AR (Augmented Reality) which will allows travelers to save time by being able to better navigate through the shops to their desired items. The technology will also create a virtual real-life environment where they’ll be able to engage with the products to have a better view of what they are actually buying. The technology is already being used by many retailers such as IKEA, Macy’s, and Kohl’s. In 2019, L’Oréal Travel Retail Asia Pacific teamed up with Lotte Duty Free to launch an augmented reality make-up try-on facility called ModiFace on Lotte’s website. Recently, Istanbul Airport has also introduced AR to improve the shopping experience of travelers.
The APAC region is expected to lead global growth in the duty free retail industry, with an estimated contribution of 44% of the market's growth during 2022-2026. The market growth in this region is expected to be faster than that of the market in European, South American, and MEA regions with China and Japan being the main contributors to the market in this region. The growth of duty free retailing in the APAC region will be primarily driven by the boom in the travel and tourism sector and the growing number of new international connections.
Amid the boom in the travel industry and rising foot traffic at duty free shops, companies like Ralph Lauren Corp (NYSE:RL), Starbucks Corporation (NASDAQ:SBUX) and McDonald's Corp (NYSE:MCD), which have presence at almost every major airport, remain the biggest beneficiaries.
Our Methodology
To compile this list, we have ranked the duty free retail companies according to their annual revenue from #10 to #1.
Annual revenue: $28 million
Flemingo International started its operations in Africa and is now among the top duty free travel retailers in the world. Flemingo International owns over 260 stores in 32+ countries and serves airports as well as seaports. With over 300+ brands and product categories, the company offers products across a diverse category range including food and beverages, groceries, electronics, luxury, fashion etc. The catalog comprises of products ranging from the most economical items to the most luxurious ones. Flemingo International's last reported sales stood at $28 million.
Annual revenue: €500 million
King Power International Group is a Thailand-based travel retail group. King Power International Group began its operations in 1989 after it was granted a license for opening the first downtown duty free shop in Thailand, Mahatun Plaza. Later in 1995, King Power International Group was the first to be granted the permission to operate duty-free shop at Bangkok's main airport, Don Mueang Airport.
King Power International Group has 9 duty free stores in major airports in Thailand and a duty free shopping mall spanning over 12,000 square meters in the central business district of Bangkok. King Power International Group was the first to get a license for a duty free shop in Thailand in 1989. The company now owns tax-free and duty free stores throughout Thailand. With over 750 products from many renowned brands, King Power International Group offers a wide variety of shopping choices to travelers. King Power International Group's revenue in 2021 stood at €500 million.
Annual revenue: €858 million
Dubai Duty Free has become one of the largest duty free retail operators since it was founded in 1983. The annual sales of Dubai Duty Free stood at $976 million in 2021. Dubai Duty Free is a go-to shopping destination for every traveler as it offers items from every category, including apparel, accessories, food, technology, gifts, and luxury goods. The total retail area of Dubai Duty Free spans over 40,000 square meters, with 4,400 people as their employees. Dubai Duty Free's sales in 2021 stood at €858 million, increasing 40% from 2020. The company recorded an average of 25,000 transactions per day with over 26 million units sold in 2021.
To lure more customers, Dubai Duty Free consistently offers prizes in lucky draws for people who buy air tickets through their platform. Dubai Duty Free offers up to $1 million in cash prizes and also offers a luxury car to winners of the lucky draw.
Companies like Ralph Lauren Corp (NYSE:RL), Starbucks Corporation (NASDAQ:SBUX) and McDonald's Corp (NYSE:MCD) are set to benefit from the rising traffic at airports and duty free shops.
Annual revenue: $1.48 billion
Duty Free Americas operates over 200 stores at major airports around the world. The company offers several products in its stores, including apparel, edibles, travel exclusives, gifts, and luxury goods. Some of the famous brands available at Duty Free Americas’ stores include Calvin Klein, Azzaro, Benson & Hedges, Beringer and Chloe. The company's business segments include Corporate, Borders, Airports, Warehouses, and Distribution Centers. Duty Free Americas’ revenue in 2021 was reported at $1.48 billion
Annual revenue: €2.1 billion
Founded in 1879 as a ship supplier, Gebr. Heinemann is now a leading wholesaler and retailer of duty free items. Gebr. Heinemann operates 340 duty free stores at 77 international airports in 28 countries. The company also operates boutiques and concept stores at border crossings and on board cruise ships. Gebr. Heinemann duty free shops offer 500+ brands and categories of products to shop from in its stores. The company has a global footprint and provides its services through its two large subsidiaries, Heinemann Americas and Heinemann Asia Pacific. Gebr. Heinemann recorded group sales of $1.6 billion in 2020. In 2021, Gebr. Heinemann’s revenue stood at €2.1 billion.
Some of the premium brands available at Gebr. Heinemann include Chanel, La Prairie, La Mer, Dior, Clinique, Estée Lauder, Tom Ford and MAC. As global travel comes back to normal, major companies like Ralph Lauren Corp (NYSE:RL), Starbucks Corporation (NASDAQ:SBUX) and McDonald's Corp (NYSE:MCD) are set to benefit from the rising traffic at airports and duty free shops.
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Disclosure: None. 10 Biggest Duty Free Companies in the World is originally published on Insider Monkey.
