The Asia Pacific travel retail industry is entering a period of structural transformation, with India and South Korea emerging as major future growth engines alongside China, according to a new joint report by Oliver Wyman and the Tax Free World Association (TFWA).
Titled “Asia Pacific Travel Retail Pulse 2026: A Health Check and the Innovation Imperative,” the report highlights how the sector is moving beyond post-pandemic recovery and adapting to long-term shifts in traveller behaviour, spending priorities and technology adoption.
The report states that while Chinese travellers contributed more than 60% of Asia Pacific travel retail growth during the last decade, their contribution is expected to decline to around 40% over the next ten years as markets such as India and South Korea gain prominence.
According to the study, affluent Chinese consumer sentiment has rebounded sharply in 2026 for the first time since 2022, leading to renewed overseas travel demand and luxury spending intentions. The Oliver Wyman Affluent Chinese Consumer Sentiment Index rose from 71 in 2025 to 115 in 2026. The report notes that 51% of affluent Chinese travellers expect to spend more on luxury goods in 2026, while 32% of high-income households plan to travel overseas.
However, the recovery is becoming increasingly diversified. The report projects Indian travellers will contribute nearly 20% of future Asia Pacific travel retail growth, while South Korean travellers are expected to account for around 10%.
India, in particular, is being positioned as the region’s next major growth engine. The report estimates that travel retail spending by Indian travellers could grow nearly four-fold between 2025 and 2035, driven by rising disposable incomes, increasing outbound travel and a rapidly expanding affluent middle class.
It also highlights that affluent Indian Millennials and Gen X travellers are showing particularly strong international travel intent. Millennials recorded a net travel sentiment score of +50%, the highest among all age groups surveyed.
The report notes that Indian travellers differ significantly from Chinese luxury consumers in their shopping behaviour. Indian travellers are described as more value-conscious and more likely to purchase gifts, wines and spirits in duty-free outlets, while Chinese consumers continue to seek premium luxury experiences and exclusivity.
Despite the improving travel outlook, the study warns that Asia Pacific travel retail is still underperforming relative to the broader rebound in tourism and passenger traffic. According to Oliver Wyman, travel retail growth has captured only around 70% of tourism spend and passenger traffic momentum since borders reopened, resulting in nearly US$5 billion in missed opportunities for brands and operators.
The report attributes this gap to two major factors: the repatriation of luxury spending into domestic markets, especially in China, and the failure of airport retail propositions to evolve beyond price-led models. It argues that consumers increasingly expect personalised, experience-driven and digitally integrated shopping journeys.
Artificial intelligence and innovation are expected to play a central role in reshaping the sector over the next decade. The report reveals that 76% of senior travel retail executives consider innovation critical to future growth, though only 40% currently rank it as a top investment priority.
While AI adoption remains at an early stage, the study says brands and travel retailers are increasingly focusing on customer-facing applications such as personalisation, targeted offers and digital engagement throughout the travel journey.
The report concludes that the future of Asia Pacific travel retail will depend less on passenger volumes alone and more on how effectively airports, retailers and brands collaborate to create seamless, data-driven and emotionally engaging experiences for increasingly diverse traveller groups.