RETAILING Airports

S$1.9 billion (US$1.5 billion at cur-

rent exchange rates) in 2012/13.
However, airport retailing ap-
pears poised for an impressive take off
in India. The renovation of most ma-
jor airports is underway with large
AIRPORT AL dedicated areas for retail stores. The
Why retailers love airport outlets. By ARPITA MUKHERJEE LURE recently opened T2 terminal at
ADVANTAGES Mumbais Chhatrapati Shivaji
OF AN AIRPO
RT OUTLET International Airport for instance,
Captive custo has about 700,000 sq ft area the
me
cheaper altrse, they have no size of over 10 soccer fields dedi-
rnative cated to retail, food and beverage,
Plenty
expense acocf business travellers o lounge and travel services. Similarly,
ounts passin n the retail space in Delhis T3 terminal
Well-heeled g through is spread over 290,000 sq ft.
vacationers
also pass th Apart from Croma, promi-
rough nent brands with a presence at
ROW
WHY IT WILL G
Indian airports are Shoppers
Stop, Hidesign, William Penn,
Pavers England, WH Smith,
among a host of others.
ports be ing Delhis Indira Gandhi
More air or rebuilt International Airport, for
privatised instance, (terminals T1 and
ming
Airports beco T3 combined) has close to
transit hubs 500 brands spread over
c re asing 323,000 sq ft. Most of
INTS Air trafc in
VIVAN MEHRA/www.indiatodayimages.com

THE CONSTRA these retailers plan to

scale up and are upbeat
about the future.
Shoemaker Pavers England oper-
scratch guards, ates 14 stores at airports, and its offi-
n tals covers, mouse, cials say the products that sell more
Very high re
o ut power banks and are the high priced ones. Its stores are
a ck of retail know-how ab pen drives. These small, between 150 and 300 sq ft in
L and
consumer dem are typically in size, with products offered varying ac-
the price range of cording to location. What Chennai
`600 to `4,000. The afflu- airport has may not necessarily be
ent Indian traveller today is also open there at Mumbai airport, and what
to shopping for big ticket items at Mumbai airport has might not be
Stop and Shop: Passengers check out the retail airports such as tablets and smart- available in Cochin, says Utsav Seth,
stores at Delhis Indira Gandhi International Airport phones. Croma sold close to 15,000 CEO of Pavers England India. White
smartphones at its airport stores in shoes sell well in Hyderabad, they
the past year. dont in Delhi. Pavers Englands
Airport retailing is a popular stores at airports do better than its

L
ast year, electronics anyone buy a set of speakers at an Joshi, MD, Infinity Retail Ltd. Croma Mumbai, Delhi, Hyderabad and concept globally but is still in its in- regular ones, adds Seth.
retail store Croma airport terminal of all places? But the is part of Infiniti Retail, a 100 per cent Ahmedabad. It has plans to set up fancy in India. The non-aeronautical It is a similar story for pens and
Retail decided to sell strategy paid off. The entire stock of subsidiary of Tata Sons. stores at Kolkata and Chennai air- revenue (largely from retail) is more accessories retailer William Penn.
JBL speakers at its speakers, priced at `5,990 each, flew Croma was among the first of the ports soon. Sales at its airport stores than double the aeronautical reve- The highest selling products are
store in Delhis T3 do- off Cromas shelves. The price was big retailers to foray into airport retail are growing at about 17 per cent an- nue at most airports abroad, but in writing instruments, says the com-
mestic airport termi- not reduced nor was there a special in India in October 2007. Today, nually, says Joshi. India it is the opposite. Singapores panys CEO, Nikhil Ranjan. The com-
nal. To begin with, it deal. All we did was give the brand airport retailing has become a busi- The products especially in de- Changi International Airports rev- pany gets about 10 per cent of its to-
was an experiment. prominent shelf space, which makes ness no chain can ignore. Croma al- mand at Cromas 850 to 2,000 sq ft enues from retail operations with tal revenue from its airport stores,
After all, why would a huge difference to sales, says Ajit ready has seven airport stores across airport stores are accessories such as more than 350 stores were over three in Delhi and one in Mumbai. It

102 BUSINESS TODAY March 30 2014 March 16 2014 BUSINESS TODAY 103

Airport Retail 1.indd 2-3 3/7/2014 5:06:03 PM

 RETAILING Airports
DILEEP KAPUR/ President, Hidesign
Airports are a good place to get customers since
there is shortage of quality retail space in India
is now actively looking at setting up very good place to get customers.
shop at most of the newly developed More so, since there has always been
airports across the country. shortage of quality retail space in
In recent years, not only has India, says Dileep Kapur, President
passenger traffic gone up significantly of leather bags and accessories-maker
with more low-cost airlines on the Hidesign. Already, global airport re-
scene, but also the time spent by pas- tailers are eyeing opportunities in
sengers at airports has increased due India. Nuance Group AG, the worlds
VIVAN MEHRA
to early check-in times set by airlines largest international airport retailer,
following security and operational through its joint venture with
concerns, says Devangshu Dutta, Shoppers Stop Ltd, has been present
CEO of consulting firm Third Eyesight. in the Indian travel retail market for
This has increased retail opportuni- six years. The company currently
ties, and airports in recent years are operates 19 stores at Mumbai
planning retail as an integral part of International Airport and five at
operations, rather than tucked away Bangalore International Airport.
in low-traffic corners. Nuance manages almost
Retailers say it makes sense to be 770,000 sq ft of retail space globally
present at airports. Airports are a and operates 300 outlets in 64 loca-
tions across the world. It reported an
aggregate revenue of CHF (Swiss
francs) 2.6 billion (`18,116 crore) in
2012. India has huge potential to
grow. Airport infrastructure is being
developed and we will see the results
soon, says Anirban Dutta
Chowdhury, Country Head, Nuance
India. The retailers highest selling
product is liquor, followed by confec-
NISHIKANT GAMRE/www.indiatodayimages.com
tionery and perfumes
Not so long ago, in 2004, when
GMR Infrastructure was given the
task of developing the Delhi airport, it
had to cajole and incentivise brands
to open shop on the premises. There
were genuine concerns about
whether customers would buy the
products, says Romy Juneja, Vice
President and Chief Commercial
Officer, GMR Delhi International.
But most retailers which chose to
enter early are still there and thriv-
ing. These include the likes of
Shoppers Stop, Croma Retail, Ethos
Watch Boutiques and Hidesign. The
GOVIND SHRIKHANDE/ MD, Shoppers Stop
Our stores at airports are as protable
as those in malls or on high streets
104 BUSINESS TODAY March 30 2014
Airport Retail 1.indd 4
Hidesign brand is a perfect fit with
airports, considering its customer is
the corporate traveller, says Kapur
of Hidesign, which has eight Hidesign
and Holii stores at airports.
Retailers, however, have to pay
much higher rent per square foot for
the space they occupy at airports
compared with other locations in cit-
ies. There is an assured customer
base and you can directly target your
core customers, that too seven days a
week, so it makes sense for companies
to be there, if theyre ready to pay the
higher rent, says Sushil Patra,
Associate Vice President, Retail,
Technopak, a consultancy firm.
The returns per square foot are
much higher at airports than at other
stores. For Croma, the annualised
realisation is close to `1.2 lakh per sq
ft at airports, while in the cities it is
close to `30,000 to 40,000 per sq ft.
It is more profitable than the regular
stores, says Joshi. Our stores are as
profitable as those at malls or high
streets, says Govind Shrikhande,
Managing Director, Shoppers Stop. It
operates six stores at airports across
the country. Retailers would not
stick around at airports if things were
not working out for them, says
Dutta of Third-Eye.
Airport retailing then appears
poised to take root in India. ~
@arpitamukherjee
3/7/2014 5:06:23 PM
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