Hyderabad Duty Free (HDF), a division of GMR Hospitality and Retail Limited (GHRL) is growing at 20% year-on-year and aiming to be the ‘largest and most preferred’ duty free business in South India by 2022.

Established in 2010, HDF sales have grown almost 4.4 times over the past eight years at Hyderabad International Airport, which handled around 3.9 million passengers in FY2019. Currently operating 1,200sq m in arrivals and departures, HDF offers more than 100 liquor brands and leading perfume, confectionery and tobacco labels. Handpicked souvenirs are also available. The majority of customers are Indian, followed by travellers from the USA and United Kingdom.

The top selling category is liquor. Then comes confectionery (Toblerone, Milka, Daim, Ferrero, Merci, Quality Street, After Eight and M&M) and perfumes with brands such as Gucci, Marc Jacobs, Chloe, Hugo Boss, Davidoff and Calvin Klein. Next is tobacco, which includes the likes of Marlboro, Davidoff, Gold Flake and Classic.

In recent years, handicrafts and souvenirs from the Southern states of India (Telangana and Andhra Pradesh) have proved popular among international passengers.

As part of its ongoing expansion, HDF will create more space for new brands and dedicated zones for promotions. Perfume brands such as Polo Club, Enhance, Dior, Versace, Tom Ford and cosmetics labels including Revlon and Mac will soon be introduced.

NEW BRAND ADDITIONS

In the liquor segment, Paul John whisky will also be available, along with leading confectionery brands such as Anthon Berg, Guliyan, Ricola, Ritter Sport, Storck and Haribo. Destination products from Smoor, Adyar Ananda Bhavan, Lal Sweets and Be Relaxed will also be offered, as well electrical products from brands including Bose and Travel Retail Innovations. Oris and Gurkha will boost the tobacco category.

Undertaking regular surveys of international passengers helps HDF understand the requirements and preferences of customers. As a result, the retailer can offer an optimum range of products. A GMR Hyderabad International Airport Limited Spokesperson said: “Based on research and surveys on passenger preference, HDF has found that Hyderabad is a majorly liquor-driven market, where customers seek better deals and offers. This insight has prompted HDF to enhance its product range in the category, keeping prices competitive and on par with duty free outlets at other airports.”

One group of Hyderabad-based travellers flying to international destinations indicated in one of the surveys that they care more about value than price.

The spokesman said: “This prompted HDF to modify its product offering to position itself in the high-value segment. This was achieved by ramping up its premium positioning across all categories, specifically liquor.”

Currently, high-value/premium liquor contributes to 25% of total sales in the category. Over the past three years, the liquor category has grown rapidly (70% +CAGR in volumes). Another survey indicated that over 75% of customers believed HDF is ‘better or at par’ with other duty free outlets in the country.

In terms of strategic marketing initiatives, these include innovation and technology with a focus on ‘superlative’ customer experience. HDF offers various passenger convenience services including wallet payment/cash back services through alliances with banks. Customers can also browse the HDF website to compare products and prices and also avail the shop and collect service.

Local market affiliation is another objective. HDF is promoting handicrafts from the Telangana and Andhra Pradesh regions, which range from Kondapalli toys to Nirmal paintings, Pochampally sarees, Bidri and Filigree to Dokra items and Hyderabad Pearls. The retailer is also showcasing handicraft products from across the nation and sourcing specialised Araku coffee and exotic spices from the region.

Additionally, HDF rolled out its Club HDF multi-tiered loyalty programme. This offers exclusive benefits and privileges. Each purchase automatically entitles members to earn points which can be redeemed for future purchases.

The retailer has also a promotional platform aimed at international flyers from the South, entitled Mana Hyderabad Mana Duty Free or My Hyderabad My Duty Free. Passengers can receive discounts of 5-15% once they spend a certain amount in arrivals.

Looking ahead, HDF is looking to offer a superior international shopping experience while providing value for money. Augmented reality and dedicated experiential zones are in the pipeline.