A gradual shift among Indian travellers to buy at duty-free shops at domestic airports on their return from overseas travel will drive business for travel retailers at Bangalore and other major airports in India.
The trend, along with the price differential on imported goods, will enable rapid growth in revenues at duty-free (DF) shops in the coming years, according to airport retailer Nuance Group (India) Pvt Ltd., or NGIPL, which manages DF shops at Bangalore International Airport (BIA).
In an interaction with Deccan Herald, the country head of NGIPL, Anirban Dutta Chowdhury said, “In terms of revenues, about 60 per cent comes from passengers arriving at BIA. We see this growing further, as the tendency among Indians to shop abroad will fade out over a period of time,” he said.
Globally, travel retail (or DF shopping) revenues are departure-led, with 70 per cent coming from passengers exiting from the airports, he added.
The revenue split is similar at other major Indian airports except New Delhi, where it is skewed even more (about 70 per cent) towards arrivals, according to aviation consultancy Centre for Asia Pacific Aviation (Capa) in its report on revenue and passenger statistics released last year.
DF revenues in fiscal 2011 stood at $215 million in India, of which New Delhi airport's share was $72.7 million, followed by Mumbai airport at $60.6 million. Bangalore grossed about $17 million. Liquor is the leading duty free category in India at about 63 per cent, compared to 17 per cent globally, according to Capa, which has projected India's DF spend at airports at $1.6 billion by 2021.
NGIPL is a 50:50 joint venture between Nuance group, Zurich and Shoppers Stop of India and has presence in BIA and Mumbai international airport. Shoppers Stop has invested Rs 36.41 crore as share capital in the venture, according to its 2012-13 annual report.