With passenger numbers expected to climb on the resuming of post-pandemic international travel over the coming years, the Asia-Pacific region will spearhead the global airport retail market, as the region’s retail market looks to grow at a compound annual growth rate (CAGR) of 7.8 percent from USD 20 billion in 2019 to USD 63.4 billion in 2026.
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According to GlobalData’s recent ‘Global Airport Retailing’ report, growth in the APAC region’s airport retail market will be driven by an increase in retail space, rising passenger numbers following the relaxation of lockdown regulations. Other drivers include the region’s mass vaccination rollout, investments in arrivals duty-free formats, and the relaxation of duty-free regulations across various countries, the research firm added.
“Airport retail sales in the APAC declined by USD 10 billion in 2020 from USD 20 billion in 2019 (-49.9 percent growth YoY). It grew slightly in 2021 to reach USD 11.8 billion (17.0 percent YoY) and is forecast to grow to USD 33.8 billion by 2026,” said Koyel Ray, Retail Analyst at GlobalData.
“Favourable 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,” continued Koyel Ray.
Meanwhile, a decrease in footfall from 3.37 billion 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.
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“Digitisation 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,” said Ray.
“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,” continued Ray.
While the report translates as positive news for the APAC airport retail sector, businesses will not see sales exceed pre-pandemic levels until 2024, GlobalData added.