Perfume and cosmetics (P&C) have emerged as one of the largest selling categories at the duty-free shops of the newly built international airport at Delhi, in some cases even surpassing liquor sales.
Talking to indiaretailing.com, Delhi Duty Free COO Arun Barathi said: “Liquor has historically been the largest selling category at the Delhi Duty Free in terms of revenue. It is still the dominant category at our shops if we consider both arrivals and departures. However, in departures, P&C are now selling more than liquor for the first time.”
Delhi Duty Free Services, which recently completed the first year of its 15-year concession at the IGI airport, retails a number of national and international perfume and cosmetic brands at the airport, including Calvin Klein, Dior and Bvlgari, along with other products such as liquor, chocolates, cigars, cigarettes, confectionary and destination goods.
Barathi said because of the company’s marketing initiatives, the overall sales at the Delhi Duty Free have doubled compared to the previous operator, though he declined to reveal the numbers. “The Delhi Duty Free under the previous operator suffered from an image problem. Passengers considered it to be nothing more than a liquor vend. Worse, some customers were apprehensive about the genuineness of the products being sold. When we took over, our challenge was to offer India a world class duty free environment and make it more buyer-friendly. It was our belief in the Indian consumer that we have managed to turn things around over in a matter of months and double the per-passenger spend at our shops,” he added.
Even in the liquor category, Barathi said, the Delhi Duty Free Services wanted customers to move up the scale from just Black Labels and Chivas Regals. “Today, we offer one of the world’s largest collections of single malt whiskies. The collection is so vast, even discerning buyers are surprised to discover brands they did not even know existed. We compete with Dubai and Singapore, so we ensure that the products we sell are at least at par with them in price, if not cheaper.”
Arrivals currently account for 60 per cent of the total revenue at the Delhi Duty Free, the rest coming from departures. Liquor still contributes about 50 per cent of the combined sales, followed by perfumes and cosmetics at 25 per cent. Confectionery brings in another 10 per cent, with the rest accounted for by categories such as tobacco and souvenirs.
Explaining the figures, Barathi said the company was very clear from the beginning on not relying overtly on liquor sales for revenue but also to aggressively focus on other promising categories such as perfumes, cosmetics and confectionery. These have now lifted the overall sales at its shops.
Another strategy the Delhi Duty Free adopted was to widen the product offerings to appeal to every segment of the 9.8 million or so passengers who walk through the international terminal every year. “Earlier, the duty free shops at Delhi addressed a very specific blue collar type of market and targeted only the up-market section of travelers. There was not much choice in products offered. Now, no matter where you are on social strata and whatever the nature of your travel, there is something for you at our shops at different price points,” Barathi said.
To promote shopping at the airport, the Delhi Duty Free has recently launched a “shop and collect” scheme where passengers flying out of the country can buy products at departures and collect them at arrivals when they return.
Many international liquor and perfume brands have chosen Delhi Duty Free in recent months for the world-wide launch of their products.