Cost competency@Delhi Duty Free
Two-and-a-half years since it started operations, speaks to Abhijit Das, Head-Marketing, Delhi Duty Free Services (DDFS) to understand the evolution of the duty free concept in India.
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venture company between Delhi International Airport (DIAL), IDFS Tradings and Aer Rianta International ( ARI), DDFS is managing and oper- ating the Duty Free Shops at Terminal 3, Indira Gandhi International Airport in Delhi. With 40,000 sq ft of retail area, India’s largest duty free operator is earning huge revenues from all seg- ments in its portfolio. After concentrating on stabilising and growing the range of liquor, tobacco, perfumes and cosmetics available at the airport terminal, DDFS has also diversified into fashion retail to score brownie points. According to Das, for any duty free operator to be at par with international standards, there are three criteria; competitive prices, wide range of products and excellent human resources. The addition of several new internationally acclaimed concepts has made the Delhi Duty Free an admired retail destination, which is now being compared to Dubai, Bangkok and Singapore airports. “We have ensured a wide range of products and product categories. The DDFS has a dedicated area for one of the largest- ever collection of Single Malts, called the ‘ Uisge Beatha’, Gaelic for ‘ Water of Life’, which accounts for 35 per cent of the revenues garnered from the liquor section,” he further explains. Tobacco products are up to 70 per cent cheaper than European duty free counters while many liquor brands are priced nearly 20 per cent lower than Middle East and South East Asian airports as well, Das reports. Currently, the duty free operator earns 40 per cent of its revenue from the liquor segment, 20 per cent from the perfume and cosmetics segment and 15 per cent from the confectionary segment.
Talking about challenges before the Delhi Duty Free, Das feels, “Liquor buying is still limited to two litres and this hampers business. The overall infrastructure problem and congestion at the smaller airports and ports is also another major concern.” Indian rupee spending limits are applicable in line with custom regulations and as of now in arrivals, Indians can spend up to INR 7,500. Departure spending in rupees is not allowed. All this does hamper the business to an extent,” argues Das.
On whether the duty free facilities will be extended beyond the airport territory, he reveals, “There are small countries where duty free shops are present within city limits. However, in India, I do not see this scenario in the immediate future as having duty free shops inside the city involves several statute-related policy decisions.” Das states,