Delhi Duty Free Services Pvt Ltd (DDFS) has the concession to manage the duty-free shops at the new giant Terminal 3 of the national capital’s Indira Gandhi International Airport. The company is a joint venture between Delhi International Airport Ltd, Indian Duty Free Services and Aer Rianta International. Arun Barathi, Chief Operations Officer, talks of his charge and the plans with Nivedita Mookerji. Edited excerpts:
What are the top three things that sell the most at the Delhi Duty Free? Is the trend any different from major airports elsewhere?
In the last nine months of operations, we have observed that liquor, perfume and cosmetics, and chocolates are the highest selling items at the departure and arrival shops. Traditionally, too, these are mostly the highest selling items in a duty-free environment, though the ratio of sales within these varies from country to country. Several airports across the world also have electronics as a major category. The latest trend in duty-free retailing is the inclusion of the fashion and luxury retail category, which is also what we are now venturing into.
Across many parts of the world, duty-free shops are present within cities, rather than being restricted to just airports. Are there any duty-free outlets in the city of Delhi, apart from the airport? Are there any plans?
Delhi doesn’t have duty-free shops within city limits, though internationally it exists in the city, airport and ports. Having duty-free shops inside the city involves several statute-related policy decisions. Though it is an exciting option to explore, as of now we are only concentrating on our presence at the T3 terminal of the IGI Airport in Delhi. We do plan to expand to other international airports in the country.
How does Delhi Duty Free compare with, say, Mumbai, Chennai or Bangalore?
It is the largest duty-free space in the country, with 40,000 sq ft of retail area. In terms of the number of people travelling out of an airport, Delhi and Mumbai airports are similar; Bangalore, Chennai and Hyderabad are yet to match up to the number. The Delhi airport has a huge advantage in terms of the excellent catchment area of the National Capital Region, Punjab, North UP, Rajasthan, etc, which makes it a far more lucrative market from a business perspective. People from these cities are well travelled and the understanding of brand and market is far better than any other part of the country.
How will the new retail initiative at the Delhi Duty Free impact the overall business?
Until now, we at Delhi Duty Free were concentrating on stabilising and growing the liquor, tobacco, perfumes and cosmetics category, besides destination products. However, we always knew that fashion retail is much sought after in a travel retail format and wanted to diversify in this domain. The addition of several new internationally acclaimed concepts have made Delhi Duty Free an extremely admired retail destination, one being compared to Dubai, Bangkok and Changi (Singapore) airports within a short span of nine months. The fact that we offer international style layouts, brand assortment, category depth, benchmarked pricing (compared to other duty-free shops in Bangkok/Dubai/Changi, etc) have helped in creating desirability.
Do international travelers shop more while coming into Delhi or while leaving?
Overall, the duty-free shops at arrivals do more business than the departure shops. In fact, arrivals account for 70 per cent of the business. This is because inbound travelers like to pick up stuff on their way back to the city. The highest selling category in arrivals has been liquor. This is primarily because the prices offered on liquor at the duty-free shops are extremely competitive.
Which are the top five countries from where tourists/travellers are buying the most from Delhi Duty Free?
Travellers from the United States, EU, West Asia, China and Japan.
What is the USP (unique selling proposition) of Delhi Duty Free?
Having the knowledge and experience of three leading partners, we have ensured a wide range of products and products categories. For instance, a dedicated area for one of the largest-ever collection of Single Malts, called the ‘Uisge Beatha’, Gaelic for ‘Water of Life’.
On the whole, Delhi Duty Free offers an assortment of world-class brands at benchmarked prices, with keen focus on retail service and experiential retailing.
What are the biggest challenges before Delhi Duty Free?
Congestion is a major concern. However, like with any other business, we do have challenges that are workable. From a consumer perspective, the biggest challenge is to always be fresh and updated, and ensure the best brands and launches are available at competitive prices.
What is the forex coming from the sales at the Delhi Duty Free? What is the potential target from here?
We are not in a position to comment on the commercial figures, as of now.
How do you look at the restriction on use of Indian rupees for purchase at the Duty Free impacting the business?
Indian rupee spending limits are applicable in line with customs regulations and as of now in arrivals, Indians can spend in rupees up to Rs 7,500. Departure spending in rupees is not allowed. It will be a big boost for the business to allow more Indian rupee spending.
