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Japan Travel Retail Market Size (2024 - 2029)

The Japanese travel retail market is experiencing significant growth, driven by an increase in inbound tourism and strong consumer spending from visitors, particularly from neighboring countries. This expansion is supported by rising disposable incomes and a surge in duty-free sales, despite the setbacks caused by the COVID-19 pandemic. The market's potential is recognized by major international retailers, and the evolving landscape is marked by changing consumer habits and regulatory changes that favor duty-free operations. As the sector recovers from pandemic-related disruptions, there is optimism for the restoration and growth of travel retail services in Japan.

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Market Size of Japan Travel Retail Industry

Japan Travel Retail Market Summary
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

Japan Travel Retail Market 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
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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.

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Japan Travel Retail Market Size - Table of Contents

  1. 1. MARKET INSIGHTS AND DYNAMICS

    1. 1.1 Market Overview

    2. 1.2 Market Drivers

      1. 1.2.1 Tourism Growth is Driving the Market

      2. 1.2.2 Airport Expansions is Driving the Market

    3. 1.3 Market Restraints

      1. 1.3.1 Currency Fluctuations is Restraining the Market

    4. 1.4 Market Opportunities

      1. 1.4.1 Digital Transformation will Create Opportunities to New Entrants

    5. 1.5 Insights on Technological Innovations in the Market

    6. 1.6 Insights on Trends in Passenger Traffic by Channels

    7. 1.7 Insights on Government Regulations and Initiatives in the Market

    8. 1.8 Industry Attractiveness: Porter's Five Forces Analysis

      1. 1.8.1 Bargaining Power of Buyers

      2. 1.8.2 Bargaining Power of Suppliers

      3. 1.8.3 Threat of New Entrants

      4. 1.8.4 Threat of Substitutes

      5. 1.8.5 Intensity of Competitive Rivalry

    9. 1.9 Impact of COVID-19 on the Market

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Product Type

      1. 2.1.1 Fashion and Accessories

      2. 2.1.2 Wine and Spirits

      3. 2.1.3 Tobacco

      4. 2.1.4 Food and Confectionary

      5. 2.1.5 Fragrances and Cosmetics

      6. 2.1.6 Other Product Types (Stationery, Electronics, Others)

    2. 2.2 By Distribution Channel

      1. 2.2.1 Airports

      2. 2.2.2 Airlines

      3. 2.2.3 Ferries

      4. 2.2.4 Other Distribution Channels

Japan Travel Retail Market Size FAQs

The Japan Travel Retail Market is projected to register a CAGR of greater than 6% during the forecast period (2024-2029)

Shiseido, Lagardere, DFS Group, LOTTE Duty Free and Fa-So-La are the major companies operating in the Japan Travel Retail Market.

Japan Travel Retail Market Report Snapshots

Japan Travel Retail Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)