INTERNATIONAL. The Data Circle, a new research joint venture formed by Generation Research, The Moodie Davitt Report and m1nd-set, this month launches its full-year 2018 Travel Retail State of the Industry Report.

The report, which compiles data and analysis from all three partners, plus an extensive introductory overview from The Moodie Davitt Report, provides detailed insights on travel retail sales results with examination by region, category and channel for the calendar year.

According to preliminary Generation Research figures (subject to final adjustment, particularly in the booming beauty category), 2018 marked another year of above-trend growth in travel retail (9.3% YoY) to US$76 billion, driven by increased passenger volume (6.5% YoY) and rising spend per person. However, growth slowed notably in the second half (7.3% YoY), reflecting a confluence of macro-economic factors that dragged growth levels.

Asia Pacific spearheaded regional growth, with sales rising by 15% YoY, ahead of the Middle East with 10%, Europe 9%, the Americas with 6% and Africa 3%. Beauty products, buoyed by the booming daigou trade, particularly in South Korea (the world’s biggest duty free market), drove category growth, outpacing overall sector gains by four percentage points. The tobacco category underperformed, with sales growth being outstripped by the passenger traffic increase.

The business in Asia Pacific and to a significant degree internationally continues to be driven by Chinese tourism and related shopping spend – both conventional and daigou-related. Chinese outbound numbers reached 159 million in 2018, a figure set to grow 13% in 2019 according to COTRI. Compared to 2010, the number of trips has doubled as the nation transitions into an upper-middle-income economy.

Despite widespread concerns over the slowing Chinese economy, that growth is set to continue. Currently about 120 million Chinese citizens own a passport, a mere 8.7% of total population, compared to 42% in the US. Increasing ease of travel and increasing income should see China’s penetration of global tourism grow. The Henley Passport Index which measures visa-free/visa-on-arrival score shows China’s score increased dramatically in 2018 to 74, up from 51 in the year before.

Variations across regions, categories and channels are examined in greater detail within the report.

Behavioural trends for 2018 are also expertly analysed by m1ndset. The report details the top drivers and the top barriers to duty free purchasing with price advantage and lack of promotional activity topping the respective lists. The report highlights notable variations in both the drivers and barriers across the regions.

The 2018 study concludes with a look forward to the key factors that will shape the sector’s fortunes in 2019, from China’s new ecommerce law to air connectivity and enhanced visa facilitation’.

The 2018 Travel Retail State of the Industry report can be purchased from The Data Circle for €5,000. For more information please contact