TR Consumer Forum 2024: The rapid growth of Indian travel retail shoppers

By Benedict Evans |

 

India is rapidly emerging as an exciting and valuable region for travel retail.

The second of two panel sessions exploring hugely diverse demographic of travel retail consumer, this time focused on Indian travel retail shoppers, shone a spotlight on the dynamics of the Indian traveller and their evolving shopping habits.

Clara Susset, Chief Operating Officer – m1nd-set; Luke Barras-Hill, Editorial Director, TRBusiness; Trevor Lee, Managing Director, TravConsult; Anne Kavanagh, Executive Director, APTRA; P.K. Thimmayya, CEO, Flemingo Duty Free all offered detailed insight into the cultural nuances and sensitivities that influence shopping decisions and interactions with travellers from this hugely important country.

M1nd-set data 

Susset presented data compiled by m1nd’set exclusively for the TR Consumer Forum, and noted India’s international departures had already surpassed pre-covid levels in 2023, with Indian travellers departing internationally well above the global average since 2021, and the forecast is set for that trend to continue.

“They will be the fifth largest travelling nationality by the end of 2024,” noted Susset, adding: “Indian travellers show a higher conversion than the global average and Indian conversion rate has actually increased compared to pre-covid.”

Alcohol was a top performer in the country, and men were over-indexed compared to the global average for both footfall and conversion.

Susset also dove into the key appeal factors for Indian consumers, with the data from m1nd-set throwing up some interesting differences to the global population, especially where concerning the prevalence of choice, price and convenience as purchase drivers, or deterrents.

Susset closed by pointing out the obvious and huge opportunity to engage with Indian shoppers prior to arrival, and the potential pitfalls of attempting to communicate with India’s large Gen Z population, who showed surprising trends in footfall, conversion and spend, especially where concerning digital interaction.

“Though this is a rather general overview of the data, what’s really interesting for me is, we see the most diverse array of choice when we really drill down into the data. A huge share of the traffic is coming from Indians living abroad, and the categories and behaviours are entirely different,” noted Susset.

Levers of growth

 Lee looked at three key levers of growth, especially where concerning staff interaction.

“The first key is culture, India has an incredibly diverse culture. Staff must understand that not all Indians are the same; they have different languages, regions and cuisines, but there are three commonalities,” he said, adding: “Like the Chinese, Indians love to bargain, they were born to bargain.”

Lee suggested staff should not outright reject attempts to bargain on price, instead redirecting shoppers to loyalty programmes, or highlighting savings possibilities within the confines of the product category.

Secondly, Lee noted, staff must be prepared to have a lot of questions thrown their way: “They will always ask lots of questions, because they want to get the ideal outcome for them. Staff need knowledge, time and patience in order to be effective.”

Lee’s third and final point referenced the dual concepts of gesture and status. Utilising a simple namaste could engender staff to Indian shoppers who are more likely to perceive the gesture as a positive attempt to communicate on a cultural and spiritual level. Appealing to Indian shoppers concept of status was another element of this.

“Always take them to the most premium section of any category first. It’s like giving them face. It’s little but it means a lot,” said Lee.

Aspirational travellers

“In tier one cities 80% are first-time travellers and in tier two it’s 98%. Many Indian travellers are aspirational, and while they may not be the most affluent, they’re more willing to experiment with different brands and non-traditional choices comparative to previous generations, that’s the new aspiring Indian traveller,” commented Thimmayya.

“We believe most of our staff can convert every second or third Indian customer, and we see really good work by liquor and beauty brands. Our brand ambassadors too are proud to carry the brand and name and are keen to become subject matter experts,” continued Thimmaya, adding: |90-95% of our business is contained within India, and we’ve made a lot of inroads in departures with things like destination categories.”

Thimmaya also spoke positively about the changes between 15 years ago and now in the way Indian travellers were treated on various airlines.

Thimmaya also spoke positively about the changes between 15 years ago and now in the way Indian travellers were treated on various airlines.

“It’s very different,” he said, commenting also on the emergence of homegrown Indian brands, especially within liquor, as a huge benefit to the overall industry: “There is a lot of pride today and a lot of good Indian brands emerging, so a gift from India can carry a lot of pride.

We see a lot of brand owners buying high quality Indian products and it’s a very good thing.”

Views from another conference

“It’s an amazing country and incredible market, so energising, such optimism and ambition,” said Kavanagh, mentioning the speed with which the APTRA Conference came about. “We set it up within three months with Delhi Duty Free, with 250 delegates ultimately attending, and our key findings were that India is an accelerating market, it’s evolving in a way where other markets took much longer to achieve,” noted Kavanagh.

Kavangah also commented on themes explored at the APTRA Conference earlier this year, espousing: “With 38,000 new passports issued every single day, Indian travellers have such an incredible discovery mindset, travel is exciting and status. A big part of it will be digitalisation alongside urbanisation and premiumisation.”

Kavanagh made a couple of big announcements on the panel too. “APTRA will be in Q1 2025, venue tbc” she said, adding: “It’s always been our [APTRA] ambition to influence the arrivals allowance from global spirits companies and retailers into India, together with spirits companies in two phases, first a market study and then the engagement with government.

This will lay the foundation for raising the international alcohol volume limit from 2l to 4l, and raise the ceiling from Rs50,000 to Rs100,000 for domestic travellers. We will then lobby the government based on the findings. We need to show we’re not cannibalising the domestic market and that it’s beneficial for India generally.”

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