Asia's Airports Are Filling Up Again, but Travel-Retail Tills Are Not Ringing

Traffic through Asian airports has been recovering, and passengers are spending more time inside terminals, but the sales recorded by travel retailers have not kept pace. The divergence suggests a change in how travellers behave rather than a passing dip in demand.

Operators across the region are finding that discounting alone no longer delivers sustainable growth. Turning passing footfall into a purchase now requires greater activation and a more persuasive reason for a traveller to step inside a store than a lower price on the shelf.

Conversations with industry figures point to a broader move away from growth driven by volume and toward premiumisation, pricing discipline and retail built around the in-store experience.

One factor cited is the retreat of daigou, the wholesale trading system in which large-volume buyers and professional purchasing groups buy goods abroad and resell them to consumers in China. That channel long helped underpin Asian travel retail's heavy reliance on deep discounts.

The picture is drawn from a recent discussion with a former global travel retail head at a leading beauty brand, who set out three potential drivers behind the shift. Beauty, a mainstay of airport retail, sits at the centre of the reappraisal.

The upshot for travel-retail operators is that rising passenger numbers can no longer be read as a guarantee of rising spend.