IRAQ. From a start-up in a war-torn market in 2004, Iraq Duty Free has grown into a respected mainstream player within the Middle East travel retail landscape. The company has thriving arrivals and departures duty-free retail operations at Baghdad International, Basrah International and Sulaymaniyah International airports (that enjoy enviably long-term contracts with the Iraqi Civil Aviation Authority); a vibrant downtown store business in central Baghdad; and plenty of exciting opportunities in the pipeline.
Iraq Duty Free has got off to a robust start in 2024, a landmark year as it marks a two-decade journey from fledgling business to a well-established and growing force in the region.
The company, Iraq’s sole ground-based duty-free retailer, began business at Baghdad International Airport in March 2004, with subsequent openings at Sulaymaniyah International (June 2010) and Basrah International (April 2014) airports. In May 2022 Iraq Duty Free extended its presence downtown, opening a store in Baghdad’s upper-class district of al-Karrada.
This year it will open arrivals and departures stores at Kirkuk International Airport in the north of the country and further downtown duty-free stores in Baghdad and al-Ramadi. The company’s confidence in the future is underpinned by its exclusive contract with the Iraqi Civil Aviation Authority – under the Ministry of Transportation – to operate all duty-free stores at Iraqi airports. Underlining the strength of its relationship with the regulator, Iraq Duty Free’s contract (which had already been extended to 2029) was renewed in 2018 for a further ten years until 2038.
Those developments are happening against an encouragingly positive travel backdrop, the company says. “Since the start of 2023 we have witnessed a consistent increase in travel with comparison to the previous year,” comments a company spokesperson.
“This has resulted in healthy sales for the first two months of the year meeting our target expectations. Obviously with the beginning of the Holy Month of Ramadan that fell at the beginning of March travel has expectedly slowed down. But with the healthy sales and growth in January and February, we are certainly on target for the first quarter of the year.”
Passenger numbers across the country are rising strongly – up from just over 8 million in 2022 to more than 9 million last year with strong growth anticipated in 2024. At the company’s flagship location, Baghdad International Airport, passenger traffic surged to more than 6 million in 2023, up from 5.4 million a year earlier.
“The Civil Aviation Authority has launched a very comprehensive programme involving a complete upgrade of systems, including e-gates at immigration, renewing check-in procedures and more immigration officers to facilitate smoother passenger service in both departures and arrivals,” Iraq Duty Free observes.
“We see huge efforts from the governments to raise systems to modern international standards,” which is a very positive sign.
That positive momentum is translating into some encouraging sales numbers, Iraq Duty Free reveals, particularly for the all-important beauty sector.
“The number one category for Iraq Duty Free has always been our perfumes & cosmetics, where we have witnessed exponential growth year-over-year,” the company explains.
“As we continue to list and introduce new products and brands, we see this trend set to continue. And perhaps more so now that we have embarked on offering a completely new niche brands category with a fresh listing of some private collections offered by our key long-term partners in the industry.
“It’s also notable how we see our passengers always seeking more expensive products as the spending power of our consumers is extremely high compared with the wider Middle East region.”
Asked for more details on the current trading performance and the key influences driving consumer demand, the company replies: “Our passengers are always interested in the latest trends and new launches, especially within the perfumes & cosmetics section.
“As Iraqi consumers are extremely brand conscious and generally spend a great deal of time on social media, they are always very pleased to find the latest launches in our stores at competitive prices compared with the region. Critically, there is the fact that they don’t question the authenticity of the products compared with what is available in the domestic market.
“Our customers are clearly influenced by big names and brands trending on social media and other advertising campaigns. The latest new launches are always a big hit for us, especially the more selective brands nowadays.”
Almost two years since the central Baghdad downtown opened with an initial 500sq m of space, progress has been impressive, the company says.
“With the combination of a product authenticity issue in the domestic market and the increase in passenger traffic, our customers are flocking to our downtown duty-free store after their travel, taking advantage of getting authentic products at duty-free prices,” Iraq Duty Free comments.
“Surprisingly – and encouragingly – the downtown opening has not affected sales at the airports store. As word gets out that Iraqi travellers are allowed by law to shop at the downtown duty-free store within 30 days of their arrival back in the country, we have witnessed a sales increase of +13% over the opening year.
“This is a true indicator of the urgent need for additional similar stores nationwide and that is why we are eagerly in search for another location in the western side of the Tigris River in Baghdad – known as Al-Karkh – for the right location to start with the second of many downtown duty-free shops we have planned.” The new emporium will be open to all returning overseas visitors, non-resident Iraqis and non-national residents, plus the diplomatic corps.
Such ambitions are mirrored by a series of planned investments across the wider Iraq Duty Free estate. “We are currently undergoing a complete renovation and upgrade of the last of the boutiques at Baghdad International Airport,” the company tells The Moodie Davitt Report.
“The makeover of the departures stores in the Babylon (Green) Terminal will conclude the final phase of the complete renovation in Baghdad. Next on our agenda will be the departures store in Basra and we hope to open Kirkuk International Airport very soon when the passenger and flights increase to a level when it would become commercially interesting.”
That all spells good news for a company established amid the turmoil of war and which subsequently survived and then flourished as Iraq stabilised. Iraq Duty Free’s heartland of Baghdad ranks as the second-most-populated city in the Arab world (behind Cairo), while an increasingly urbanised population – 70% of which are under 30 – features a fast-growing and affluent middle class.
All those factors augur well for the travel retailer as it embarks on its third decade and the next chapter of what has been an extraordinary journey. ✈
*This article first appeared in The Moodie Davitt Magazine. Click here for access and turn to page 96.
