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(formerly Counter Intelligence Retail)

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Why beauty needs strategic focus in Europe

Travel retail analyst, research and category expert CiR says that a focus on beauty sales in 2018 could be a winning strategy for operators. Why? Because next year is EU-China Tourism Year (ECTY) 2018 and there are high hopes that Chinese travel to Europe will surge.

Beauty is a crucial shopping category for the Chinese – with some sub-sectors proving irresistible. Some 41% buy skincare, which compares to just 25% for the average global buyer in DF&TR, according to CIR research. For cosmetics the difference is also significant: 39% versus 30%. 

Chinese footfall into beauty departments is also much higher at 30% versus a global average of 23%. Meanwhile their average spending on beauty is $164 versus a global shopper’s $120. When it comes to brands, Estée Lauder and Dior stand out on the demand curve: 18% versus a 4% global average for Lauder, and 13% versus 7% for Dior.  

Where are the Chinese going?

Data from Business Lounge, the business intelligence arm of CiR, shows that the best growth of Chinese outbound travellers up to March 2018 (based on scheduled departing seat capacities) will be chiefly intra-Asian destinations. 

When it comes to Europe, the latest year-on-year forecasts from CiR for the 12 months to March 2018 show that the top five growth markets for the Chinese will be: Georgia (+93%), Belgium (+62%), Switzerland (+39%), Spain (+28%), and Russia (+24%).

Garry Stasiulevicuis, Founder and President of CiR, comments: “Duty free and travel retailers across Europe – but especially in the markets we have highlighted above – should be gearing up their businesses for the Chinese influx. As the ECTY gets underway, EU destinations will become more visible to the Chinese and that should translate to a much improved EU arrivals picture in 2018 in general. Operators and beauty brands need to be geared up to understand this opportunity.”

The Chinese are a top-spending nationality in European duty free and travel retail yet they only represent 2% of total international arrivals into the EU, according to European Tourism Commission. The EU has promised to make quick progress on EU-China visa facilitation and air connectivity which may help to increase this share.

Current Chinese snapshot in Europe

In the 12 months to July, 3.7m Chinese travelled to Europe from their home country, according to CiR Business Lounge figures, a rise of +14.3%. Based on international flights to Europe (see chart below), the top three destinations were Russia with a 22% share, Germany (16%), and France (14%).

From a city/airport perspective, the top three arrival points were Paris Charles de Gaulle (14% share), Moscow Sheremetyevo (13%) and Frankfurt (12%), while the top carriers were Air China (22%), China Eastern (10%) and China Southern (10%).

For further information, please contact Alison Hughes, CiR Beauty Director

NB. PAX Source: CiR Business Lounge | Advanced Analytics Tool - Data based on Scheduled departing international passengers only. Data displayed for nationalities is based on residency through place of ticket purchase