Featured article: Retail Asia
This article was first published on Retail Asia on Sept 14, 2026, and was written by Izabella Yan, VP, Sector Analysts at Third Bridge.
Converting footfall now takes greater activation and a more compelling reason to step inside, beyond just a lower price.
Across Asia, travel retailers are discovering that discounting is no longer enough to drive sustainable growth. Through our ongoing conversations with industry experts, we have observed a fundamental shift away from volume-led growth towards premiumisation, pricing discipline, and experience-led retail.
Traffic is coming back through Asia's airports, yet travel retail sales continue to lag.
That disconnect signals a change in consumer behaviour. Travel retailers can no longer assume that higher footfall will automatically translate into higher spending. Instead, the challenge has become one of conversion: creating compelling reasons for travellers to enter stores, engage with brands, and ultimately make a purchase.
Drawing on a recent call with a former global travel retail head at a leading beauty brand, we set out three potential drivers of this new trend.
Daigou in retreat
For years, Asian travel retail ran on deep discounts and wholesale daigou — a trading system where large-volume buyers or professional buying groups would purchase foreign goods and resell them to consumers in China.
During the pandemic, this model helped sustain volumes when international travel collapsed. But whilst it solved a short-term problem, it also created long-term challenges. Heavy discounting compressed margins weakened pricing discipline and conditioned consumers to expect products at significantly reduced prices.
Today, brands are deliberately moving away from that model, according to our expert. Rather than selling through wholesale buyers, they are refocusing on travellers, investing in premium experiences and rebuilding pricing discipline. The objective is healthier margins, tighter inventory management, and stronger brand equity.
In our discussions with industry experts, one theme consistently emerged: success is increasingly measured not by how much product moves through the channel, but by whether brands can protect pricing whilst delivering sustainable growth.
For some brands, this discipline appears to be paying off, our expert notes. Chanel largely avoided the daigou model, and even as the wider APAC travel-retail market struggled, the brand kept growing. Conversely, generalist skincare brands that relied on heavy promotions are now faced with the more difficult task of rebuilding profitability whilst restoring consumer confidence in their brands.
The transition, however, remains uneven across the region.
South Korea, long the heart of the daigou trade, appears to be stabilising from steep double-digit declines to a low-single-digit dip, though its retailers still have to relearn selling to real travellers rather than moving pallets to wholesalers.
At the same time, the excess beauty inventory following the closure of Sunrise Duty Free continues to cast a shadow over pricing in China. Such overhangs rarely make headlines but can undo months of pricing discipline in the China market.
The emergence of a different traveller
The consumer is also changing.
Chinese shoppers remain the region's largest spending pool but appear to be increasingly travelling independently rather than in tour groups. This shift marks the emergence of a more sophisticated, better-informed traveller, one who is more interested in a ‘buying experience' than a promotion, our expert suggests.
Markets built on the old model of heavy reliance on Chinese tour groups are particularly exposed. Thailand is the clearest case. King Power, its dominant operator, has been under financial strain, and Chinese visitors have returned more slowly than expected, an expert says.
That more sophisticated traveller has changed what sells.
Shoppers now place greater importance on ingredients and proprietary technologies over promotional pricing, our expert says. Prestige skincare built on proprietary formulas keeps growing and holding its price, whilst mid-market brands lose ground and those that chase full-promotion strategies appear to be under greater pressure.
The same pull is visible in fragrance, the fastest-growing category in the region yet still relatively underpenetrated. Niche perfumeries seem to be multiplying, most visibly in Hong Kong, where the airport's fragrance line-up has expanded sharply since its reinvention to court individual travellers rather than tour groups, our expert says.
The battle for attention
Traffic is back, but shoppers do not appear to be walking into stores with the same volume, our expert says. Despite travellers lingering in the airport terminal for as long as ever, converting footfall now takes greater activation and a more compelling reason to step inside, beyond just a lower shelf price.
Our expert suggests that Singapore Changi has arguably gone furthest in demonstrating this shift, using global first launches and destination exclusives to give travellers reasons to browse rather than simply buy.
Operators are reinforcing the shift by integrating beauty with F&B and impulse categories, like confectionery to capture footfall. As travel retail evolves, airports are increasingly treated as brand media and a place to hold a share of voice, as much as a point of sale.
Conclusion
As traveller traffic recovers and sameness sets in, retailers that provide something unique may be better positioned to stand out. Whether the shift from discount to premium offering and better customer experience actually works is yet to be seen.
The key metric to watch is whether retail sales can grow faster than traveller numbers, the benchmark travel retailers in Paris and London have long used, and the one APAC has yet to meet.
All insights in this article are based on information provided by Third Bridge experts.
For media enquiries, please contact: comms@thirdbridge.com
Relevant transcripts
2026/06/29 APAC Travel Retail – Regional Playbook Shifts & Changing Channel Landscape
