Caribbean duty free retailing market was valued at US$ 832.2 million in 2020, according to the Caribbean Duty Free Retailing Market Report, by Product Type (Fragrance & Cosmetics, Wines & Spirits, Fashion & Accessories, Tobacco, Watches & Jewelry, Confectionary & Fine Foods, and Gifts and Others) and by Sales Channel (Air Terminals, Ports, and Others), published by Coherent Market Insights.
Caribbean duty free retailing market was valued at US$ 832.2 million in 2020 and is expected to exhibit a CAGR of 21.7% during the forecast period (2021 to 2028). The purchase of goods or items in airports, cruises, and ports where no additional taxes are levied is termed as duty free retailing. As there are no or minimal taxes/ fees at international borders, customers tend to purchase products at duty free shops.
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Browse 50 market data tables* and 45 figures* on “Duty Free Retailing Market” – Caribbean Forecast to 2028.
Key Trends and Analysis of the Caribbean Duty Free Retailing Market:
- One of the rising trends of the Caribbean duty free retailing market include increasing adoption of digitization and e-commerce portals for shopping. Increasing online purchases is expected to drive the Caribbean duty free retailing market growth. Companies are now launching online platforms to attract customers to purchase from duty free stores. For instance, a company named Earthworks Pottery, Pottery manufacturer in White Hill, Barbados developed its website for boosting sales of its duty free pottery products. With the help of this website, the placed order can be delivered to the individual traveling at the airport or seaport as per the prescribed time.
- Various airlines have started adopting online sales channel to widen the sales of duty free goods. For instance, in August 2019, Caribbean Airlines launched a mobile app that facilitates customer experience for online ticket booking and purchasing duty free goods products.
Market Opportunities
- Caribbean duty free retailing market has a great opportunity, owing to the launch of limited edition/exclusive products. Many companies have started partnering with duty free stores to launch their limited or exclusive products, which in turn, is expected to drive the market growth. For instance, in May 2019, a prominent manufacturer of leather products, Furla Inc. entered into a partnership with Top Brands International, a prominent player engaged in marketing and managing duty-free shops to open a duty free store at Silvio Pettirossi International Airport in Paraguay.
Market Restraints
A major factor restraining the Caribbean duty free retailing market include low customer interest in shopping at airports. Security checks, airline’s gate allocation, and boarding procedures can limit the amount of time of a customer for shopping at airports. Free Wi-Fi at airports encourages customers to use their smartphones or laptops during their free time, which can keep them away from the retail section. A survey report from the Duty free World Council has given reasons for passengers not purchasing at duty free stores. The reasons include lack of promotional campaigns at these stores, unavailability of a broad range of products, and time constraint for shopping at airports due to less layover time.
Key Takeaways
- On the basis of product type, fragrance & cosmetics segment dominated the Caribbean duty free retailing market in 2020, accounting for around 23.3% of market revenue share, followed by wines & spirits, fashion & accessories, tobacco, watches & jewelry, confectionary & fine foods, and gifts and others. The growth is attributed to the rising number of international travelers, across several Caribbean countries. For instance, according to the data from The World Bank, around 4.684 million international tourists arrived in Cuba during 2018, as compared to 4.594 million in 2017.
Key Players
Key players operating in the Caribbean duty free retailing market include Dufry AF, Duty Free Caribbean Holdings, Evelop, Cave Shepherd & Co. Ltd., Pure Grenada, Habanos S.A., and Duty Free Pointe Seraphine.
Moreover, market players in the Caribbean duty free retailing market are focused on merger & acquisition to increase their market share. For instance, in December 2020, Dufry AG, a retailer which operates duty-free and duty-paid shops and convenience stores announced the successful completion of the previously announced merger with its subsidiary Hudson Ltd., a global travel experience company, with an aim to focus on duty free and duty-paid travel retail, as well as opportunities in alternative channels such as airport food & beverage operations.
Caribbean Duty Free Retailing Market - Impact of Coronavirus (COVID-19) Pandemic
The COVID-19 had significant negative impact on the Caribbean duty free retailing market. The duty-free retailing market across the Caribbean region majorly encompasses the sales of tax-free goods such as cigars, alcohol, perfumes, confectionery, cosmetics, and jewelry. The market is majorly consolidated at airports, ports, land borders, and cruises, where several travelers are willing to purchase duty free goods. However, the emergence of the COVID-19 pandemic has significantly disrupted this market due to several factors such as nationwide lockdown, sealed international borders, and travel restrictions. Furthermore, the fluctuating prices of petroleum have impacted the supply chain, thereby hampering the market growth. However, vaccine approvals against the novel virus along with the reopening of international borders for travelers and tourists is projected to positively impact the market growth over the post-pandemic period.
Market Taxonomy
By Product Type
- Fragrance & Cosmetics
- Wines & Spirits
- Fashion & Accessories
- Tobacco
- Watches & Jewelry
- Confectionary & Fine Foods
- Gifts and Others
By Sales Channel
- Air Terminals
- Ports
- Others
