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HindustanTimes Mon,15 Sep 2014

Dubai, London passé, Indians prefer duty-free shopping at home airports

Soubhik Mitra, Hindustan Times  Mumbai, December 01, 2013
First Published: 00:36 IST(1/12/2013) | Last Updated: 00:50 IST(1/12/2013)

Until a couple of years ago, frequent flier Sabrish Shetty planned his business trips in a way such that he had time to spend at duty-free sections of chosen foreign airports. The Bandra-based entrepreneur would select US-bound flights with a long stopover at Dubai, to shop at the airport. But, all that is passé.

Last week, when Shetty landed at Mumbai, his baggage took around 30 minutes to reach the conveyor belt. He used that time to buy his favourite scotch, perfumes and some cosmetics for his wife.

An increasing number of international fliers such as Shetty have stopped depending on foreign airports for duty-free shopping. “Since all the popular brands are available here, there is no need to shop elsewhere,” said the 42-year-old, adding that the pricing at Indian airports is also at par with international airports. “You don’t mind spending an extra dollar on a bottle of scotch here if it saves you the trouble of damaging it in transit.”

While international air passenger traffic in India rose by 97% in the last five years, non-aeronautical revenues increased by 340%. Retail spends at airports was primarily responsible for this spurt, according to the Centre of Asia Pacific Aviation (CAPA), an aviation industry think-tank. CAPA states that from an estimated turnover of US$215 million (approximately Rs. 1,341 crore) in 2011, duty-free spends at Indian airports are likely to reach US$1.55 billion (approximately Rs. 7,176 crore) by 2021.

“Duty-free spends at Indian airports will surge as per capital incomes in India are expected to triple over the next decade,” said Kapil Kaul, CEO, Southeast Asia, CAPA. He added that duty-free shopping at Mumbai and Delhi airport will likely increase by 25% every year.

Liquor sales are a major contributor to the spurt in duty-free shopping. They comprise 63% of sales at duty-free zones, followed by fragrances (14%), confectionary (9%) and tobacco (7%).

At Delhi airport, demand for single malts grew by more than 50% over the last two years. “The range of malt is between US$50 (approximately Rs. 3,120) and US$6500 (approximately Rs. 4 lakh). This shows how HNIs as well as value buyers are buying at Delhi airport,” said a spokesperson with the Delhi International Airport Limited.

At Mumbai, premium liquor brands such as Glenfiddich, Glen Ord and Glenlivet have outdone regular brands.

Prices of most duty-free goods at Indian airports are at par with prices at foreign airports and that also acts as a major catalyst in fliers preferring to shop here.


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