Duty Free Shops

AIBM

April - June 2017

Duty free shops provide a mesmerising shopping experience for travellers. Seen in the picture is GO Duty Free Shop at Chennai Airport

In a bid to enhance the Duty Free zones in international airports, AAI makes its move to make retail and shopping an integral part of the Indian aviation industry.

Airports are not only an essential logistical element in a country, but they also reflect a nation’s trends and culture. Through its various retail offerings of both domestic and international type, the civil aviation sector has come to play a major role in today’s globalised economy. India is currently the ninth largest market in the world and is set to become world’s third largest by the year 2034, in the aviation sector. With this, airports have the potential of becoming a promising melting pot of commerce and business.

Duty Free areas certainly enjoy quite a lot of relevant competitive advantages. At airports, the daily flow of individuals traveling is characterised by passengers with a high tendency towards impulse buying. The propensity to purchase depends also on the waiting times before the hackles of the boarding process. People seem to support the idea of the influence the airport atmosphere plays in the purchasing action. Many people admit they are affected by the number of people in the airport and travel retail areas.

Airports Authority of India (AAI) is committed to the cause of creating a world class airport network, has solidified their intent to offer customers a blissful shopping experience. AAI, is in a position to do so as they manage more than 125 airports across the country, which include 21 international airports. The aim is to make Indian airports a top-notch shopping destination and cater to the ever growing numbers of passengers by expanding its horizons. AAI had called out for Global tenders in 15 major airports in September 2015 with an aim to provide best shopping experience to the passengers. After rigorous scrutiny and tendering process, AAI is happy to announce that the Global tender for operating Duty Free shops were floated and two global bidders have been successfully awarded.

The aim is to stage the 15 airports with strategic and innovative practices and would help to shape up the growth story of Indian aviation and retail scenario. AGM Duty Free Selatan Sdn. Bhd. of Malaysia, secured the tender for operating duty free shops in five airports such as Trivandrum, Visakhapatnam, Pune, Coimbatore and Madurai. M/s Flemingo Duty Free has successfully secured other major airports.

In Duty Free shops, the perception of customers is particularly influenced by the atmosphere of the airport and stores. In order to appeal to customers and make them purchase, companies in Duty Free and airports collaborate to create the best atmosphere and experience for passengers. After all airports are a window to the country’s culture. With Duty Free shops of international standards in its inception, AAI can incorporate global elements into the development plans for Indian airports.

AAI is likely to gain substantial revenue from this commercial activity and better business is expected thereof, along with upgraded shopping avenues and quality of life for the passengers. The total annual revenue is expected to be around USD 21.2 million. This license shall allow these players to develop design, built, operate and maintain Duty Free outlets in International Airports for a period of seven years. This endeavor shall evolve into a futuristic niche market in its own right allowing innovative and mesmerising shopping experiences for international customers at par with international retail centres.