Duty-free stores at airports are buzzing these days! Know why

Lured by discounts and a growing range of spirits and perfumes stocked by operators, more Indian travellers are spending money at duty-free stores in local airports instead of overseas.

"There has been an upswing in Indian passport holders shopping at Indian duty-free areas," Anirban Dutta Chowdhury, India head of Zurich-based duty free retailer Nuance Group, told ET.

He said that the average contribution of Indians to total sales was 72% from 2008 to 2011 and now there has been an increase of 18%, taking it to 90% from 2012 to 2015 period.

The size of the duty-free market in India is about $500 million and will double to over $1 billion in the next 3-4 years, according to industry figure.

The experience of passing through an Indian international airport such as Delhi or Mumbai has changed and this could be the possible reason behind rise in sales, said Manishi Sanwal, managing director of DFS India.

"Privatisation of airports, too, has led to a large-scale change in the business. Also, tastes and preferences of Indian travellers have changed. They are much more aware of the latest consumer brands, he said."

Dutta Chowdhury of Nuance, which operates stores at Mumbai and Bengaluru airports, said the largest chunk of duty-free shoppers — about 50% — buy liquor. About 15% buy chocolates, 13% buy perfumes and the rest go for souvenirs, clothes and gadgets.

"Our global relationship with the brands helps us to launch the offerings at the same time as it would happen at any international duty-free airport," Chowdhury said.

DFS Group, which is majority owned by Moet Hennessy Louis Vuitton, shifted to a 60,000 square foot area at Mumbai's new international Terminal T2 in February 2014. Its store at the previous Mumbai airport terminal covered a third of that area. According to Sanwal, gone are the days when whisky meant Jack Daniels and Chivas Regal for Indians.

"Nowadays, people demand brands such as Glenrothes, Glengoyne and Bruichladdich," he said, referring to increasing preference for a wide range of singlemalt whiskies.

Duty-free stores also offer discounts, the most popular being pre-orders, said Sanwal. The customer places an order before leaving for an overseas destination, which is delivered on his return at a 5%-10% discount. It's cheaper, saves the passenger from carrying extra luggage and reduces shopping time after an exhausting trip.

Chowdhury said fast growth in duty-free sales is at the Mumbai and Bengaluru airports.
(Image: Indiatimes)