Generation statistics point to Asian boom in 2000

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On the eve of the Tax Free Asia Pacific show Swedish analysts Generation Group have released preliminary duty-free market statistics which point to a healthy growth of 15.6% in AsiaPacific duty-free sales last year. This was significant enough to tilt the global market back into growth for the first time since abolition. Generation is forecasting that by the time final data is available, it will show global sales reaching £20.5bn, an increase of 2.5% over 1999.

It is projected that duty-free and travel retail sales in Asia Pacific will grow by an annual double-digit rate of 10.1% until 2010.  Last year, sales reached nearly $ 5.7bn, a figure that Generation is forecasting will treble by the year 2010 when sales are projected to reach $16bn. At such a rate, Asia/Pacific would be in a strong position to dominate the world's duty-free business with a 40% share of the global trade.

Generation have also released preliminary data on the latest global trends for each product category. The liquor category appears to have further lost market share, somewhat to perfumery products but principally to luxury goods such as jewellery, leathergoods, accessories and electronics. The liquor market share in global duty free has fallen from 34.8% in 1983 to 28.5% in 1991 and again to 18.5% in 2000. On present trends wines, spirits and beer are forecast to represent no more than 13.7% in 2010 but neverthless posting an average 3.5% sales volume growth per year, and much higher in specific categories such as wines.

In 2000 the female perfume category registered estimated sales of $2,150m in travel-retail and duty-free making it one of the key categories in duty-free overall. The popularity of women's fragrances in duty-free is partly explained by the fact that scents are bought both for personal use and as gifts. According to Generation the increasing sophistication of store design, layout and service combined with heavy promotion of new lines have resulted in the fact that duty-free perfumery sales have developed at a rate no less than three times that of domestic markets.

Last year total cosmetics sales reached $1,650m, an increase of over 18% and representing most of the market growth in the perfumery category. This equates to over one third of total global perfumery sales. 

In 2000 the sale of duty-free tobacco products reached an estimated $2bn at consumer prices which represents a very substantial decrease of 20% compared to the results in 1999. Tobacco has long been one of the cornerstones of every duty-free shop's offering but the statistics point to a a decline in all categories: cigarettes, cut tobacco as well as cigars. However the reaction of suppliers is less clear given that duty-free sales amount to about 0.5% of tobacco companies' global (the Chinese domestic market excluded) sales of cigarettes on the basis of volume. During the next 10 years duty-free tobacco sales are nevertheless estimated to grow by 4.2% annually.

The luxury goods category (items other than liquor, perfumery, tobacco and confectionery) continued its rapid growth since it became in 1988 the single most important product group in duty-free. Sales in 2000 posted an increase of 16% reaching $8.3bn, partially due to the diversification of European operators and partially due to the growth in the Asian market where corners and instore areas for fashion and accessories dominate.

One of the fastest-growing categories in duty-free in recent years is confectionery and this trend continued last year.  In 2000 sales of confectionery and fine foods reached almost $1.6bn (with confectionery representing 76.2% of this figure) and increase of 3%.  Innovative marketing and gifting concepts and creative thinking have contributed to this encouraging development, said Generation

For more information about Generation Group information products for the travel-retail industry follow the web link on this homepage or email best.n.most@generation.se