Bouncing back: Beauty category will play key role in driving APAC’s travel retail recovery

By Amanda Lim contact

- Last updated on GMT

Beauty category is set to be one of the major growth drivers of APAC's travel retail industry. [Getty Images]
Beauty category is set to be one of the major growth drivers of APAC's travel retail industry. [Getty Images]

Related tags: Travel retail, Apac, China, hainan

The beauty category is set to be one of the major growth drivers of Asia Pacific’s travel retail industry as people once again undertake cross-border trips.

Travel retail, which has been a major sales channel for the beauty industry, was among the most severely impacted by the COVID-19 pandemic in the past two years.

Ashish Chopra, CEO Delhi Duty Free Services (DDFS), revealed that for the month of April, perfume and cosmetics (P&C) surpassed all other categories for the Indian travel retailer.

“P&C is very important for the scheme of things. Our growth for P&C from 2018 to 2020 has been at about 30%," ​he said during the recent Tax Free World Association (TFWA) Asia Pacific Live event in Singapore.

Chopra added that from April 2019 to Apr 2022 the category grew by 5% in terms of sales, noting that sales was possibly hampered factors such as the lack of testers.

He remained positive about the growth of the category, noting that the firm saw an opportunity to reinforce it for departures.

“We have a huge focus on P&C especially at departures. As digitalisation comes, we hope that passengers will have more time to spend on departures. With arrivals there’s so much anxiety, it’s just pick and go. At departure, they spend more time to try the products and they will buy more.”

‘Engine room of global travel retail’

The president of the Asia Pacific Travel Retail Association (APTRA), Sunil Tuli, underlined APAC’s role in driving travel retail recovery

With more authorities lifting travel restrictions, business recovery in the region’s travel retail industry was well underway, said Tuli, who is also the CEO of King Power, Hong Kong, 

“In terms of business recovery for our members, it's obviously still early days. But across our member base is a growing feeling of confidence that is coming,”​ said Tuli.

“We must never lose sight of the huge opportunities offered by this region. It remains the engine room of global travel retail. By sharing a more cooperative partnership abroad, we are in a position to drive the industry forward. If you want to know where travel retail recovery will be centred, it's right here,”​ said Tuli.

Over the past two years, China’s duty-free market showed great resilience to the pandemic, thanks to the government initiatives to help duty-free players.

“The Chinese authority’s policy of championing offshore duty-free sales on Hainan Island has given rise to a thriving sector that generated U$9.47 billion in sales last year,” ​said Erik Juul-Mortensen, president of TFWA.

“Compare that with the British government's baffling decision to scrap tax-free shopping for all passengers leaving UK airports from the start of 2021. Global Blue estimated that that move is costing the country U$8.2 billion of lost tourist spending on Britain's high streets and at its airport every year.”

The list of countries across the region opening their doors to vaccinated travellers included Australia, India, Indonesia, Malaysia, New Zealand, Singapore, South Korea, and Vietnam.

This has led to reports of increased spending per passenger in recent months as more travellers streamed through airports.

“Every day there are more people travelling. For instance, here in Singapore Changi Airport, [passenger] traffic has more than doubled in April from March, approaching 40% of pre-pandemic levels in just one month of borders were fully reopened to vaccinated travellers,”​ said Tuli.

Related topics: Business & Financial

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