Airport retailing taking off as Chinese consumers travel and spend more.
Airport retailing in Asia Pacific grew by 20% in 2012
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Airport retailing grew in Asia Pacific by 20% to $12.2bn in 2012, enabling it to surpass Europe to become the largest region for the first time. Verdict’s Global Airport Retailing 2013 report shows that China is the main catalyst for this, with its increasing economic power and continued major expansion in air travel infrastructure, and the desire of its growing middle class to travel abroad.
Continuing strong growth in Asia, through rising numbers of travelers and increasing average spend per passenger, will see the Asia Pacific region’s share of the world total soar to 46.6% in 2016 from 34.3% in 2011, and we expect it to count for more than half of global airport retailing by 2017.
By contrast, Europe grew by only 1.1% in 2012, although this was up against very a strong comparable in 2011 of 12.4%, and Verdict predicts it to grow by 3-5% a year over the next four years.
The stark contrast between the two regions highlights their different economic performances and also the gap in their ability to grow their airport retailing space. Over the next three years, China will increase its number of airports to 230 from 182, while in Europe only five new airports are planned before 2030, due to environmental and political concerns. Passenger growth in Europe will most likely come from low cost carriers, and such passengers tend to spend less at the airport, as they are not entitled to purchase duty-free.
Without access to space growth, and the increasing use of low cost carriers, European airports need more wealthy customers to generate retail growth, and enticing more Chinese visitors is a key way to achieve this. There is growing pressure on governments to lower the cost and bureaucracy that Chinese nationals face in getting visas, and we expect many will make it easier as competition for their spend intensifies.
All product categories are expected to grow rapidly, with health & beauty remaining the biggest selling category worldwide, but Verdict expects clothing & accessories to be the fastest growing over the next four years, up 82.1% to $4.5bn in 2016.
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