Can the Indian travel retail market take up the slack from China?

With China suffering from much slower travel retail spending in recent years, India has emerged as one alternative revenue generator in Asia, especially in segments like liquor and beauty, TRBusiness can report.

At the TFWA Asia Pacific Conference on Tuesday 13 May, a workshop titled ‘Market Watch: India’ looked at some of the emerging opportunities, as well as the challenges, that are shaping India’s duty free future.

The session opened with a presentation from consultancy Kearney, offering a detailed, data-led view of the market based on a new study.

Senior Partners, Victor Dijon and Neelesh Hundekari, tag-teamed in giving the audience a holistic view of India’s airport retail landscape.

“India’s travel retail market could triple by 2030, with retail growth outpacing air passenger volumes, as both domestic and international hubs are evolving fast,” commented Dijon.

Hundekari added: “Retailers are upgrading from transactional to premium experiences, while brands tap into new consumer segments beyond traditional duty free categories. People like to compare India with China, but it’s only people who have not been there that do that. They are very different countries.”

India also has the momentum right now. With 400 airports expected in the market by 2047, up from about 160 today, there are immense opportunities. “There is a huge amount of investment in airports, and India will be the third largest air passenger market very soon, with people spending more,” said Hundekari.

Tier one airports hold the key

But even now, the opportunities are extensive. The airports serving the few tier one cities in India – usually considered to be Bangalore, Chennai, Delhi, Hyderabad, Kolkata and Mumbai – represent roughly 60% of all traffic according to Kearney.

Yet, only 25% of duty free sales come from their departure sales, so travel retailers in these airports should be focusing on leveraging this unfulfilled potential.

Also driving growth is GDP per capita in the general population, and the number of millionaires. “There is wealth inequality, and it is putting more money in the hands of the rich. When they travel, they shop; spending on looking good and living well,” continued Hundekari.

Understanding the local shopper is important. “Indian consumers are value-conscious and they look for personal products at prices they know they can’t get in domestic markets,” he said. “They are also digitally savvy and will compare prices at airports around the world to work out where they will get the best deals.”

He pointed out that the conversion rate for international passengers at Indian airports was still very low at around 10% (much lower than China), so there lies another untapped opportunity.

Dijon, based in Zurich, noted that privatisation of airports was driving duty free sales. “There is much more sales conversion in airports that are privatised,” he said. The duty paid segment is another that need more focus because India is a large domestic travel market.

40,000 passports issued every day

However, international travellers will remain the industry’s focus. “There are 40,000 passports being issued every day, and that’s a big number,” noted Dijon, who said that loyalty programmes that were integrated to offer more convenience could be a good way of attracting first-time travel newbies to shop.

Kearney presented some key data points about the Indian market.

Later, in a fireside chat, the Kearney executives were joined by Ashish Chopra, CEO of Delhi Duty Free. He has seen many of the consumer changes in the Indian market first-hand and said: “India’s outbound and inbound travel is not just growing – it’s transforming. Data-led personalisation, premiumisation, value perception, and brand discovery are driving purchase intent like never before in Indian travel retail.

“India is not just a market to watch – it’s a market to engage, invest in, and innovate in. Travel retail in India stands at a tipping point of transformative growth.

“In the past, Indian travellers were reluctant to buy in India and shopped in places like London, Dubai, and Thailand, but that has been changing.”

Despite the infrastructure in China being many years ahead of India, as Hundekari noted in the discussion, the consumer preferences are different with regards to product categories, so leveraging these variations can, and are, producing strong travel retail sales in India.

At a basic level, he said: “Chinese consumers prefer western brands whereas Indian shoppers prefer Indian brands with consumption occasions tied to events like weddings, Diwali and other festivals, so strong domestic brands should be looked at more.”

In the whisky segment, Indian brands like Paul John, Rampur, Amrut, and Royal Stag have all increased their profile with travellers.

Chopra noted too that, with the rising wealth of Indians, more of them want to buy luxury products like watches and sunglasses, as well as trading up to higher-end spirits and beauty products.

“Indian home-grown products are also competing with the best of international brands, so India should no longer be considered a budget market,” he said.

“The new Indian consumer is value-conscious yet aspirational. They seek global quality with local relevance,” explained Chopra. “This group will define the next decade of travel retail growth. Our strategy focuses on making premium products accessible using curated price-points, multi-brand bundles, and digital-first engagement. India’s middle class is not just a volume market – it is a value market in transition.”

Chopra closed with a reminder that the sheer volume of India’s middle class offers unmatched market potential. “They represent the next wave of travel retail growth, blending scale, aspiration, and a hunger for global brands and elevated experiences,” he added.