Market Size of Japan Travel Retail Industry
Study Period | 2020 - 2029 |
Base Year For Estimation | 2023 |
Forecast Data Period | 2024 - 2029 |
Historical Data Period | 2020 - 2022 |
CAGR | 6.00 % |
Market Concentration | Low |
Major Players*Disclaimer: Major Players sorted in no particular order |
Japan Travel Retail Market Analysis
The Japanese travel retail market generated a revenue of over USD 16.37 billion in the current year and is anticipated to register a CAGR of more than 6% for the forecast period.
As the inbound tourism market grows rapidly in Japan with strong spending among Chinese, Taiwanese, Korean, and Hong Kong visitors, the potential of the travel retail market in the country has not gone unnoticed, especially among the major international travel retailers. Growth in disposable incomes, consumer spending, tourism, and duty-free sales are some of the major factors fuelling the growth of the Japanese Travel Retail Market.
The Japanese travel retail market is evolving due to new business dynamics, changing consumer habits, and a continued surge in visitors from foreign countries. The success of some of the popular product categories, such as Japanese cosmetics, is led by Shiseido group brands, and confectionery is led by brands such as Royce and Tokyo Banana. The change in regulations has benefitted duty-free arrival shop operators who are currently restricted to selling only imported liquor, tobacco, confectionery, and perfumes in their arrival shops.
The COVID-19 pandemic hugely hampered the growth of the travel retail sector in Japan, and the closure of retail stores in travel hubs in the country has contributed to overall losses for many big brands. Players like Shiseido, which is a Japanese beauty giant, witnessed a nearly 18% decline in their travel retail division due to the disruptions caused by COVID-19. Furthermore, during COVID-19, domestic travel and foreign visitors' expenditures to Japan declined significantly due to the impacts of the COVID-19 pandemic. Post-COVID-19, the market activity picked up airport retailers and downtown operators in Japan are braced for the restoration of full duty-free and travel retail services as they tread a cautious path to recovery.
Japan Travel Retail Industry Segmentation
Travel Retail is commonly used to describe the duty-free retail industry, in addition to all retail activities dedicated to travelers and tourists. A complete background analysis of the Japanese Travel Retail Market includes an assessment of the economy, market overview, market size estimation for key segments, emerging trends in the Market, market dynamics, and key company profiles covered in the report. The Market is segmented by Product Type (Fashion and Accessories, Wine and spirits, Tobacco, Food and confectionary, Fragrances and Cosmetics, and Other Product Types) and by Distribution Channel (Airports, Airlines, Ferries, and Other Distribution Channels). The report offers market size and forecasts for the Japan Travel Retail Market in terms of value (USD) for all the above segments.
By Product Type | |
Fashion and Accessories | |
Wine and Spirits | |
Tobacco | |
Food and Confectionary | |
Fragrances and Cosmetics | |
Other Product Types (Stationery, Electronics, Others) |
By Distribution Channel | |
Airports | |
Airlines | |
Ferries | |
Other Distribution Channels |
Japan Travel Retail Market Size Summary
The Japanese travel retail market is experiencing significant growth, driven by the rapid expansion of inbound tourism and increased consumer spending from visitors, particularly from East Asian countries such as China, Taiwan, and South Korea. This growth is supported by rising disposable incomes and a surge in duty-free sales, attracting major international travel retailers to the market. The market is characterized by evolving business dynamics and changing consumer habits, with popular product categories like Japanese cosmetics and confectionery leading the way. The regulatory environment has also favored duty-free operators, enhancing their sales capabilities. Despite the challenges posed by the COVID-19 pandemic, which severely impacted retail activities and led to substantial losses for major brands, the market is on a recovery path, with airport and downtown retailers preparing for a resurgence in travel retail services.
The travel retail sector in Japan is a vital component of the tourism industry, offering numerous tax-free shopping opportunities across airports and major cities. The government's initiative to expand tax-free shops has significantly increased their number, further enticing international tourists. The market is highly competitive, with both international and domestic brands like Shiseido, Lagardère, DFS, and Lotte Duty-Free vying for market share. Despite challenges such as limited price competitiveness, Japanese retailers maintain an edge by offering unique local products not available in foreign duty-free shops. Recent developments, such as Shiseido's launch of the Baum brand in travel retail and Lotte Duty-Free's expansion in South Korea, highlight the dynamic nature of the market and the ongoing efforts to capitalize on the growing influx of international visitors.
Japan Travel Retail Market Size - Table of Contents
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1. MARKET INSIGHTS AND DYNAMICS
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1.1 Market Overview
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1.2 Market Drivers
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1.2.1 Tourism Growth is Driving the Market
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1.2.2 Airport Expansions is Driving the Market
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1.3 Market Restraints
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1.3.1 Currency Fluctuations is Restraining the Market
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1.4 Market Opportunities
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1.4.1 Digital Transformation will Create Opportunities to New Entrants
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1.5 Insights on Technological Innovations in the Market
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1.6 Insights on Trends in Passenger Traffic by Channels
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1.7 Insights on Government Regulations and Initiatives in the Market
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1.8 Industry Attractiveness: Porter's Five Forces Analysis
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1.8.1 Bargaining Power of Buyers
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1.8.2 Bargaining Power of Suppliers
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1.8.3 Threat of New Entrants
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1.8.4 Threat of Substitutes
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1.8.5 Intensity of Competitive Rivalry
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1.9 Impact of COVID-19 on the Market
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2. MARKET SEGMENTATION
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2.1 By Product Type
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2.1.1 Fashion and Accessories
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2.1.2 Wine and Spirits
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2.1.3 Tobacco
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2.1.4 Food and Confectionary
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2.1.5 Fragrances and Cosmetics
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2.1.6 Other Product Types (Stationery, Electronics, Others)
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2.2 By Distribution Channel
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2.2.1 Airports
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2.2.2 Airlines
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2.2.3 Ferries
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2.2.4 Other Distribution Channels
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Japan Travel Retail Market Size FAQs
What is the current Japan Travel Retail Market size?
The Japan Travel Retail Market is projected to register a CAGR of greater than 6% during the forecast period (2024-2029)
Who are the key players in Japan Travel Retail Market?
Shiseido, Lagardere, DFS Group, LOTTE Duty Free and Fa-So-La are the major companies operating in the Japan Travel Retail Market.