Across Asia and the Gulf, airport concourses are no longer just corridors between check in and boarding gates. They are becoming high energy retail theaters where younger travelers from China, India, the United Arab Emirates, Saudi Arabia, Qatar and other fast growing markets are rewriting the playbook on what, where and why passengers spend. Armed with rising incomes, digital savvy and a taste for premium experiences, Gen Z and Millennial flyers are now driving a new era of airport retail growth that is reshaping duty free strategies from Hainan to Hyderabad, Dubai to Doha.
A market powered by demographics, not just traffic counts
The global airport and duty free sector has rebalanced after the post pandemic surge, but growth is increasingly coming from who is traveling rather than how many are in the air. Industry research shows airport retail sales continued to expand in 2024, with duty free revenues climbing at double digit rates even as overall sales growth moderated. Airports Council International Asia Pacific and Middle East noted in a recent study that more than half of airports surveyed are now generating commercial revenues above 2019 levels, despite only modest gains in passenger volumes, underscoring the outsized impact of higher spending cohorts.
Central to that shift is the emergence of Gen Z and Millennials as the most valuable customer segments in terminals across the region. The ACI study found that younger travelers now spend around three and a half times more than Gen X and Boomers when indexed, and are significantly more inclined to buy categories such as electronics and luxury goods. Rather than treating duty free as an afterthought, these passengers plan shopping into their journey, comparing prices across channels and often arriving at the airport ready to purchase big ticket items not easily available at home.
This behavioral pivot is particularly pronounced in Asia Pacific, which analysts expect to dominate global travel retail in the years ahead. Market forecasts suggest the region could reach more than 100 billion dollars in travel retail sales by the end of the decade, with China and India leading growth. Domestic air traffic has risen only slowly in some markets, but passenger spend per head has grown far faster, confirming that rising affluence and a taste for premiumization among younger buyers are now more important growth engines than simple footfall.
China’s Hainan and hub airports test the new retail blueprint
China sits at the center of this generational retail reset. The country’s outbound tourists have long been a cornerstone of global travel retail, but domestic duty free policies have turned Hainan Island and major urban hubs into powerful magnets for young spenders. A sweeping overhaul of Hainan’s tax free regime in 2020 tripled individual annual shopping quotas and broadened the product mix to include electronics and high value luxury items. In the five years since, official figures show duty free sales on the island surging to well over 20 billion dollars equivalent, with tens of millions of shoppers drawn by the promise of world class brands without overseas price tags.
Recent data from Sanya, one of Hainan’s key resort cities, illustrates how quickly momentum can build when policy and demand align. In a five day shopping campaign held in December, duty free sales topped 500 million yuan, with daily turnover above 100 million yuan and yearly tallies surpassing 20 billion yuan, well ahead of prior years. Authorities and retailers are increasingly targeting younger domestic tourists, who are using Hainan not simply as a beach escape but as a curated shopping destination where limited editions, beauty brands and next generation electronics are front and center.
At large gateways such as Shanghai Pudong, Guangzhou Baiyun and Beijing Capital, the same forces are playing out in a slightly different format. Rather than only offering traditional liquor and tobacco shelves, operators are rebalancing the mix toward beauty, fashion, tech and niche lifestyle labels that appeal to Gen Z and Millennial taste. Retailers are also introducing omnichannel features popular among younger Chinese shoppers, from pre order through super apps to contactless payment and fast pickup at the gate. Although Hainan’s duty free receipts have seen periods of volatility because of regulatory crackdowns and shifting travel patterns, the broader direction is clear. China’s young travelers are comfortable treating the airport as an extension of their favorite malls and digital marketplaces.
India’s young flyers push airports into lifestyle territory
If China is the established powerhouse of Asian travel retail, India is the insurgent. A swelling middle class, rapid growth in air connectivity and a youth heavy population are converging to create a dynamic new market for airport shopping. Studies of consumer behavior suggest that Millennials and Gen Z in India are already wielding hundreds of billions of dollars in direct spending power and are on track to account for close to half of national consumption within the next year or two. They are willing to pay for brands, experiences and convenience, and airport terminals sit at the crossroads of all three.
Travel itself has become a priority spending category. One recent analysis of Indian consumers found Millennials leading the way in travel expenditure, allocating a larger share of their budgets to flights, stays and experiences than any other generation. As more of these trips involve air travel, airport retail naturally benefits. Duty free and travel retail liquor sales in Indian airports, for example, grew at more than double the rate of the domestic spirits market in 2024, as international passengers used their journeys to trade up to premium whiskies and vodkas that feel aspirational yet attainable.
Operators are responding by turning terminals into lifestyle environments tailored to younger sensibilities. At Kempegowda International Airport in Bengaluru, the recent launch of a social lounge concept known as Gate Z signaled this shift. Designed as a “Gen Z style” hangout, the space blends relaxed seating, contemporary design and digital touchpoints to encourage passengers to dwell longer and engage more deeply with surrounding food, beverage and retail options. In Mumbai and Delhi, expanded luxury and fashion zones, stronger local designer representation and more experimental food concepts mirror the evolution that Indian malls have undergone under youth led demand.
UAE and Saudi Arabia turn hubs into global shopping showcases
In the Gulf, airport retail has long been a pillar of the travel experience, but the profile of the shopper and the shape of the offer are changing. The United Arab Emirates remains one of the world’s reference points for duty free, with Dubai and Abu Dhabi together handling well over 100 million passengers a year and generating some of the largest duty free turnovers globally. As traffic patterns normalize, a growing share of purchases is coming from younger residents and visitors who see the airport as a place to explore global brands, test beauty products trending on social media and pick up electronics that are competitively priced compared with downtown stores.
Gen Z and Millennial shoppers in the UAE are particularly receptive to the exclusive ranges and airport only bundles that travel retailers are pushing in categories such as perfume, cosmetics and consumer tech. Analysts tracking regional duty free trends note that electronics spending in the Middle East climbed strongly in the last year, as value conscious younger passengers took advantage of tax advantages and limited edition releases unavailable in regular malls. The experiential retail strategies adopted by leading operators, with high impact flagship stores and immersive brand corners, are aimed squarely at an audience that values Instagram friendly environments as much as discounts.
Saudi Arabia, meanwhile, is in rapid catch up mode as it expands international gateways in Riyadh, Jeddah and other cities under its broader economic diversification plans. New terminals with dozens of additional duty free and specialty stores are part of a push to position the kingdom’s airports as commercial destinations in their own right. With a youthful population at home and growing transit flows between Asia, Europe and Africa, Saudi hubs are tailoring their product mix to younger travelers who combine religious or business journeys with moments of self indulgence. Beauty, fashion, electronics and contemporary fragrance houses are now sharing shelf space with more traditional categories such as gold and regional perfumery.
Qatar and other Gulf markets court connected, experience hungry passengers
Qatar’s Hamad International Airport has emerged as one of the most ambitious examples of airport retail reinvention. The Doha hub has invested heavily in creating a terminal environment that feels more like a high end shopping gallery and art museum than a conventional transit node. For Gen Z and Millennial travelers, many of whom are connecting between Asia and Europe, the combination of iconic art installations, designer flagships and open plan food zones offers both distraction and discovery during layovers.
Operators in Qatar and neighboring markets such as Oman and Bahrain are focusing on three levers that resonate particularly strongly with younger demographics. The first is curation, with lineups of beauty, fashion and tech brands that match online trends and influencer endorsements. The second is seamlessness, enabled by digital wayfinding, mobile pre ordering and rapid collection points that help time pressed passengers convert intention into purchase. The third is authenticity, with more space devoted to local designers, regional flavors and souvenirs that feel distinctive rather than generic, answering younger travelers’ desire to bring home meaningful mementos rather than simple logo merchandise.
These strategies mirror a broader regional pattern identified by industry analysts, who report that the Middle East now accounts for a significant share of global duty free sales despite its relatively small population base. Within that, the UAE, Qatar and Saudi Arabia contribute the majority of revenues. As Gen Z and Millennial tourists and expatriates continue to pour through these hubs, their preferences are increasingly setting the benchmark for what airport retail should look and feel like worldwide.
New spending habits: from impulse to informed indulgence
For decades, duty free was largely synonymous with last minute impulse buys, and a large share of purchases are still made on the spur of the moment. The ACI Asia Pacific and Middle East study estimates that around 70 percent of airport retail decisions remain impulse driven. Yet among Gen Z and Millennial travelers, impulse is being redefined. Younger passengers are still open to serendipity, but they prepare for it by researching products and prices online, scanning social media reviews and building wish lists that they can act on quickly if they spot a good deal in transit.
This fusion of planning and spontaneity shows up in category choices. Beauty and luxury remain the strongest performers in Asia Pacific and the Middle East, but electronics, niche fragrances and local specialty products are rapidly climbing the rankings. Gen Z passengers are several times more likely than Boomers to purchase electronics at the airport, using tax advantages and curated assortments to pick up headphones, wearables or handheld devices. They are also more inclined to test and buy niche beauty brands or K beauty style skincare that may not yet have full brick and mortar distribution in their home cities.
At the same time, older patterns are not disappearing entirely. Boomers still over index in categories such as alcohol and confectionery, and those segments remain mainstays of duty free revenue, particularly in markets where gift giving is tied to spirits or sweets. The generational overlap is forcing retailers to craft more segmented layouts and promotional strategies. Corner whisky boutiques and chocolate emporiums cater to traditional shoppers, while minimalist beauty labs, sneaker walls and gadget bars entice the young. Airports in China, India, the UAE, Saudi Arabia and Qatar are among the most advanced in experimenting with these dual track approaches.
Digital layers and sustainable values reshaping the terminal journey
Technology is the connective tissue in this new era of airport retail. Gen Z and Millennials expect the same level of digital fluency at the airport that they experience in urban lifestyle districts. In Asia Pacific, facial recognition and mobile payment systems already account for a substantial share of terminal transactions, reducing friction at checkout and allowing travelers to complete purchases even when boarding times are tight. Pre order platforms, sometimes integrated into airline or e wallet apps, let passengers reserve items before they arrive, often with additional discounts or loyalty bonuses that reward savvy shopping.
Despite the growing role of digital discovery, however, younger travelers still strongly favor in store interaction for the final purchase. They want to test a fragrance, compare screen sizes or feel the weight of a watch in their hands. That places a premium on store design and staff engagement. Retailers are equipping sales associates with tablets that pull up customer profiles or product specs on demand, and building flexible merchandising zones that can be rapidly re skinned around new social media trends or influencer collaborations.
Sustainability is another factor gaining traction among Gen Z passengers in particular. Surveys in the ACI study found that a significant majority of younger travelers are willing to pay more for sustainable products, whether through eco friendly packaging, ethical sourcing or carbon offsetting initiatives. Yet relatively few airports currently put sustainability at the center of their retail strategies, suggesting a gap between expectations and execution. As competition intensifies for youth spending, leaders in China, India and the Gulf are likely to differentiate themselves by foregrounding local brands with transparent supply chains, refillable beauty concepts or lower impact travel accessories.
What the next phase of airport retail growth could look like
The convergence of youth driven spending power, supportive infrastructure investment and targeted policy reforms means that China, India, the UAE, Saudi Arabia, Qatar and their regional peers are poised to remain at the forefront of airport retail innovation. Forecasts from market research firms indicate that Asia Pacific will maintain the largest share of global duty free and travel retail sales through at least the end of the decade, while the Middle East will continue to punch well above its weight thanks to its role as an intercontinental transit hub.
In the near term, expect more airports in these markets to double down on experiential zones similar to Bengaluru’s Gate Z, multi brand beauty halls in Hainan or luxury boulevards in Doha. Pop up collaborations with fashion, music and gaming brands popular among Gen Z will become more common, turning concourses into live stages for product drops and limited runs. Data analytics will be used more aggressively to map passenger flows and fine tune store locations, assortment and pricing in real time, with particular attention to flights originating in young, high spending markets.
For travelers passing through, the impact will be tangible. A layover in Dubai or Riyadh may feel less like waiting time and more like a curated urban micro break, complete with artisan coffee, gallery grade art and a chance to discover a new local designer or skincare line. A weekend hop to Hainan or Goa might come with a shopping list compiled in advance, targeting duty free only bundles or exclusive collaborations. As Gen Z and Millennial flyers continue to assert their preferences, the days when airport shopping meant a quick dash for perfume and chocolates are fading. In their place is a more layered, lifestyle oriented ecosystem where retail is an integral part of the journey itself and where the fastest growing markets in Asia and the Gulf are setting the tone for the world.