Leading Indian duty free operators, Delhi Duty Free Services and Nuance India, are developing their businesses with an eye to premiumising their offers in the coming months.

 

DDFS, which is targeting sales in excess of €100m ($133m) this year, is set for a major revamp of its departures area at Terminal 3 of Delhi’s Indira Gandhi International Airport in which brands are set to come to the fore.

 

Meanwhile at Bangalore Airport, where Nuance holds the main duty free concession, growth has been very strong [in the past three years TRBusiness understands it to have been +30%] and higher-end offers are pipelined. This move has come as a result of average transaction values moving up.

 

CEO of Delhi Duty Free Services, Duncan Lawley (left), says: “Passengers are still growing pretty strongly and we have a lot of development and in-store activities within the shops themselves.”

 

HERO BRANDS

A review of the T3 business has put the emphasis on brands – now that more Indians are recognising them – and this is going to be reflected in the stores as plans are made to improve category visibility.

 

A revamp of the liquor shop – a main driver of the business is on the cards for next year and it will lose its generic category focus. “Rather than do it by category, for example, gin vodka and whisky sections, I would rather use the brand’s identity,” Lawley tells TRBusiness. “This way people can see that there is a Cognac area, for example, because there is a big Rémy Martin space there. If you think how much is spent in developing these brands – to me it says far more than a simple sign for Cognac.”

 

The core category in the liquor shop is whisky, not a surprise given the Indian obsession with it. Here popular blended brands are also likely to become more prominent, but there will also be a move to greater segmentation. “We will rejig it so that people can more easily see the malt section, the deluxe and the standard,” adds Lawley.

 

CIGARS COMEBACK

At Bangalore, Nuance is re-introducing cigars to take its tobacco business more high-end on the back of a trend seen in liquor.

 

Anirban Chowdhury, Country Head, Nuance India (right), says: “If we look at the movement of premium whiskies – and the growth of Scotch – we believe there could be potential for the cigars category and therefore we are bringing it back,” he says. But Nuance warns that it is not simply about adding more expensive products; the passenger profile needs to be taken into account.

 

At Bangalore, for example, the mix is strongly male-dominated with a skew to IT industry employees because Bangalore is India’s tehcnology hub. About 55% of passengers belong to the knowledge industry including biotech and are aged 28-35. “They are therefore affluent but not rich – and they are aspirational,” says Chowdhury.

 

So while these customers have significant disposable incomes, those incomes are not very high. “That’s the reason we don’t range the $5,000 whiskies,” he adds, something that DDFS probably can do simply because it operates at the air hub of the capital city which has a sizeable number of rich residents.

 

[Read the full Indian market report in the TFWA Cannes issue of TRBusiness, out now.]