The Asia-Pacific (APAC) will continue to drive the global airport retail market as the APAC retail market is expected to grow at a compound annual growth rate (CAGR) of 7.8% from US$20bn in 2019 to US$63.4bn in 2026. The growth is driven by an increase in retail space, rising passenger numbers following the relaxation of lockdown regulations, mass vaccination rollout, investments in arrivals duty-free formats, and the relaxation of duty-free regulations across various countries, says GlobalData, a leading data and analytics company.

According to GlobalData, the passenger numbers in the APAC region will climb by 33.9% in 2022, providing a boost in retail sales. However, it will not exceed pre-pandemic levels until 2024. The decrease in footfall from 3,370 million in 2019 to 1,568 million in 2020 has led to strategies to drive convenience and speed such as automated retailing, and contactless payments and services.

Koyel Ray, Retail Analyst at GlobalData, comments: “Airport retail sales in the APAC declined by US$10bn in 2020 from US$20bn in 2019 (-49.9% growth YoY). It grew slightly in 2021 to reach US$11.8bn (17.0% YoY) and is forecast to grow to US$33.8bn by 2026. Favorable demographic profiles improved economic performances the consumer desire to travel, and continued investments in airport infrastructure will support a rise in APAC passenger numbers and airport channel growth.

“Digitization measures helped provide normalcy after the pandemic by incorporating automated retail concepts like self-service vending machines, contactless payment systems, and antimicrobial coatings on self-service devices to keep shops clean.

“Airport retailers are welcoming data technology innovation to improve customer engagement. Retailers are employing rolling robots, facial biometric scanners for security check process to avoid physical contact, and 24/7 grab-and-go stores to revive airport sales and protect consumers from further outbreaks.”

Beauty is one of the larger retail sectors in travel retail; airport operators are right to increase their focus on beauty and skincare sectors, and travel retailers can capitalize on this trend by offering value, exclusivity, and variety to attract millennials and Generation Z consumers. However, the recent geopolitical tension between Russia and Ukraine and the prospect of tensions developing into a global war will increase insecurity among travelers if the turmoil persists.