Travel: India’s Global Travel Retail Ascent: The Power of a New Traveller

InsightTrendsWorld
Sep 19
8 min read

What is the India Travel Retail Rising Star Trend? This trend describes India's emergence as a new and powerful force in global travel retail (GTR), particularly within the beverage alcohol sector. Driven by a rapidly growing population of international travellers, rising disposable incomes, and a cultural shift towards premium and experiential spending, Indian consumers are now critical to the future success of GTR.

Explosive Passenger Growth: Indian passenger numbers are expected to grow by a remarkable 50% over the next five years, making them a vital demographic for the travel retail industry.
Rapid GTR Volume Increase: Total beverage alcohol (TBA) volumes in India's travel retail market grew by 13% in 2024, significantly outpacing the 6% growth in India's domestic market. This contrasts with a global TBA market that is essentially flat.
Shift in Consumer Behavior: Indian consumers, particularly Millennials and Gen Z, are moving away from price- and utility-driven purchases to become more brand-conscious and focused on "experiential spending."

Why this Topic is Trending: A Rare Growth Engine This trend is gaining significant attention because India offers a rare and much-needed source of growth for a global industry facing challenges. While global beverage alcohol volumes are stagnant, the GTR channel is projected to grow, and India is a major driver of that growth.

Global Market Stagnation: The broader global beverage alcohol market is forecasted to be flat between 2024 and 2029. This makes the GTR sector's projected 3% CAGR and Asia's 4% CAGR stand out as crucial growth opportunities.
Economic and Demographic Drivers: India's disposable income and travel demands are growing faster than their global counterparts. This is creating a new, affluent consumer base with the means and desire to spend on premium products while traveling.
Changing Domestic Landscape: Changes in domestic pricing in India are making some standard and premium spirits more affordable at home. This is pushing international brands to pivot their GTR strategies, focusing on more exclusive or aspirational offerings to retain a competitive edge in the travel retail space.

Overview: The Indian Traveller’s Impact The IWSR analysis paints a clear picture: the Indian traveler is no longer a secondary market but a primary driver of growth for global travel retail, particularly in beverage alcohol. This is a story of economic shifts, changing consumer mindsets, and a market poised for an explosive expansion. The challenge for brands is to move beyond a one-size-fits-all approach and strategically cater to this new, sophisticated consumer base.

Detailed Findings: A Market in Transition The article provides a detailed look at the current state and future potential of the Indian travel retail market.

Dominance of Whisky: Whisky, and specifically Scotch, holds a dominant position, accounting for 74% of India’s duty-free spirits volumes in 2024, with Scotch making up 65% of that share. This is fueled by its perception as a valuable gifting item.
Signs of Diversification: While whisky dominates, other categories are showing rapid growth from a smaller base. Japanese whisky volumes grew by a staggering 110% in 2024, Irish whiskey by 51%, and vodka by 48%. This signals a slowly evolving palate among Indian consumers.
The Gifting Culture: The article notes that Indian consumers prefer purchasing Scotch and Bourbon in GTR because they perceive them as better value for money, making them popular choices for gifting.
Brand Adaptations: In response to this trend, global brands are adopting "India first" strategies, including creating Diwali-themed and city-themed gift packs and partnering with Indian celebrities to establish cultural relevance.

Key Success Factors of Product: Value and Experience The products that are succeeding in this trend do so by appealing to the Indian consumer’s dual motivation for value and an elevated experience.

Aspirational Gifting: Premium products like single malts, aged whiskies, and craft gins are succeeding because they are seen as aspirational and suitable for gifting, a deeply ingrained cultural practice in India.
Perceived Value: The "better value" perception of imported spirits like Scotch in GTR compared to the domestic market is a crucial factor. This motivates the purchase of these products while traveling.
Curated Experiences: The success of in-store duty-free experiences, with premium products "front-and-centre," shows that the physical retail environment and a sense of discovery are key to attracting and retaining the Indian traveller.

Key Takeaway: Beyond Whisky, a Evolving Palate The most important takeaway is that while Scotch whisky is the current cornerstone of the Indian GTR market, the palate of the Indian consumer is rapidly diversifying. The explosive growth of categories like Japanese whisky, Irish whiskey, and vodka, even from a small base, signals that brands that successfully introduce a wider variety of offerings will capture the next wave of growth. The market is not just expanding; it is evolving.

Core Trend: The GTR's New Global Growth Driver This trend identifies India's emerging role as a key growth driver for the global travel retail market, moving it from a region of potential to one of critical importance for beverage alcohol sales.

Description of the Trend: The New Golden Age of Travel Retail The trend is characterized by a "new golden age" for travel retail, powered by a rapidly growing and increasingly affluent Indian travelling population. This is fundamentally altering the global GTR landscape by creating a new epicenter of demand and forcing brands to develop more localized and culturally relevant strategies.

Key Characteristics of the Core Trend: Market Dynamics and Demographics This trend is defined by a specific set of demographic and market characteristics.

Young, Affluent Consumers: The rise of Gen Z and Millennial consumers in India who are traveling more, earning more disposable income, and prioritizing brand-conscious and experiential spending is a core driver.
Unparalleled Growth Projections: Unlike many mature markets, India's air passenger traffic and GTR volumes are projected to grow at rates that are multiples of the global average, providing a unique opportunity for brands.
Domestic Market Divergence: The trend is partly fueled by a divergence between the domestic and GTR markets in India. Pricing reviews in some states have made some products more affordable domestically, pushing GTR to focus on exclusive or premium offerings to maintain relevance.

Market and Cultural Signals Supporting the Trend: India's Global Influence This trend is supported by several broader market and cultural signals.

India's Economic Rise: India is on track to become a major economic power, which is directly translating to a larger middle class with the financial means to travel internationally.
Increasing International Mobility: The forecast of a 50% increase in Indian passenger numbers over the next five years, fueled by a booming aviation sector, indicates a strong desire for international travel and experience.
Cultural Emphasis on Gifting: The strong cultural tradition of gifting in India provides a powerful built-in motivation for GTR purchases, as premium alcohol is a popular and aspirational gift.
Globalization of Taste: The diversification of the domestic beverage alcohol market, with consumers expanding their repertoires beyond traditional categories, shows a cultural openness to new and global flavors.

What is Consumer Motivation: The Social and the Personal The Indian consumer's motivation is a blend of social and personal drivers.

Social Status and Gifting: Consumers are motivated by the desire to purchase a product that conveys status and is a suitable gift, reinforcing social ties and demonstrating success.
Experiential Shopping: For Gen Z and Millennials, the motivation is not just about the purchase but the experience. They are drawn to duty-free environments that offer a unique, engaging, and premium shopping experience.
The Perception of Value: A key motivation is the perceived value proposition of buying international brands in a duty-free environment, which is often seen as more cost-effective than buying them in the domestic market.

What is Motivation Beyond the Trend: Aspirations and Identity Beyond the immediate motivations, there are deeper psychological drivers at play.

Aspirations: The purchase of a premium international brand of alcohol is an act of aspiration, a way to show that one has "arrived" and has a sophisticated, global palate.
Cultural Identity: While Scotch is dominant, the small but growing presence of Indian whiskies in GTR suggests that Indian consumers are also motivated by a desire to support and showcase their own premium local brands on a global stage.
Exploration and Self-Expression: For younger consumers, the motivation is about exploration and self-expression. Trying new categories like Japanese whisky or craft gin is a way to define their identity and demonstrate their unique preferences.

Descriptions of Consumers: The Discerning Indian Traveller

Consumer Summary: This consumer is an urban Indian adult, likely a Millennial or from Gen Z. They are part of a rising middle and upper-middle class with increasing disposable income. They are digitally savvy, brand-conscious, and value experiences over simple utility. They are not just looking for a good deal but for a product that tells a story, whether it's an exclusive duty-free offering or a premium gift. They are also culturally connected, with gifting and celebration being key parts of their lifestyle.
Who are them?: Urban Indian adults who travel internationally.
What is their age?: Primarily Millennials and Gen Z.
What is their gender?: The article does not specify, but the trends apply to all genders.
What is their income?: They have rising disposable incomes, likely middle to upper-middle class.
What is their lifestyle?: They are connected, worldly, and increasingly prioritize travel and premium experiences as a part of their lifestyle.

How the Trend Is Changing Consumer Behavior: From Transaction to Experience This trend is fundamentally changing consumer behavior in the GTR space.

Shift from Necessity to Discovery: The consumer's mindset is shifting from simply buying what is needed to actively seeking out new and premium products.
In-Store Engagement: The article mentions that in-store experiences are "increasingly resonating" with Indian passengers, highlighting a shift towards more active and engaged shopping behavior in GTR.
Pre-Purchase Planning: The high importance of price and the value perception suggest that these consumers are likely to be digitally savvy and may engage in pre-purchase research to compare duty-free prices with domestic prices.

Implications of trend Across the Ecosystem: The Strategic Pivot The implications of this trend are significant for every player in the ecosystem.

For Consumers: They will have access to a wider variety of premium and exclusive products in GTR, tailored specifically to their tastes and cultural preferences.
For Brands and CPGs: This is a call for a "strategic pivot." Brands need to move beyond a generic global strategy to adopt "India first" approaches, from product packaging to celebrity partnerships. Ignoring this trend means missing out on a massive, high-growth market.
For Retailers: Airport retailers and duty-free operators must invest in creating more engaging and premium in-store experiences. Simply offering discounted products will no longer be enough. They need to become a destination for discovery and luxury.

Strategic Forecast: The Rise of India-Centric Marketing This trend points to a future where "India-centric" marketing becomes a core part of the global travel retail playbook.

Localized Marketing: Brands will continue to create India-specific campaigns and products, such as Diwali-themed packs, to connect with consumers on a cultural level.
Portfolio Diversification: The diversification seen in domestic markets will eventually spill over into GTR. Brands will need to expand their offerings beyond traditional categories like Scotch to include a wider range of spirits, wines, and RTDs.
Investment in Experience: There will be a greater investment in creating unique in-store experiences, including tastings, masterclasses, and interactive displays, to cater to the consumer's demand for experiential shopping.

Summary of Trends:

Core Consumer Trend: The Rise of the Aspirational Gifter. The Indian traveller is increasingly motivated by social status and a cultural tradition of gifting, leading to a strong demand for premium products in GTR.
Core Social Trend: Cultural Gifting in a Globalized Context. A deep-rooted cultural practice (gifting) is intersecting with the rise of international travel, creating a powerful economic force in a specific retail channel.
Core Strategy: Localizing Global Brands. International brands are realizing they cannot use a one-size-fits-all approach and must create products and marketing strategies specifically for the Indian market to succeed.
Core Industry Trend: The New Center of Gravity. The beverage alcohol GTR market's center of gravity is shifting towards India, making it a critical focus for brands and retailers seeking growth.
Core Consumer Motivation: Value, Gifting, and Exploration. The Indian consumer is motivated by a combination of getting good value, fulfilling a cultural need to gift, and a personal desire to explore new brands and categories.

Final Thought: A New Chapter for Global Retail The rise of the Indian traveller in global travel retail marks a new chapter for the industry. It's a testament to the power of a single, dynamic demographic to reshape an entire global market. For brands and retailers, the message is clear: the future of GTR is not just about where the world is going, but about where India is going. To succeed, they must understand, respect, and strategically cater to the unique motivations and evolving tastes of this vital new consumer base.