Indian airport terminals emerge as hottest retail hubs

With the airports of major metros getting a makeover, they fast are emerging as the hottest retail spaces for brands. In fact, for some labels like Fabindia, their airports stores are the best performing outlets compared to stores at other locations in the cities.

According to estimates by the Centre for Asia-Pacific Aviation (CAPA), duty-free spend at Indian airports is expected to reach 1.6 billion dollars (over Rs 10,000 crores) by 2021, witnessing an eight-fold increase in a decade and the combined spend on duty-free, duty-paid and food & beverage will reach 3.5 billion dollars (over Rs 22,000 crores).

Delhi's IGIA airport has been the biggest in terms of retail sales for several brands and many global names have chosen to open their debut store at this airport. Names like Victoria's Secret and Salvatore Ferragamo are a few examples. IGIA boasts of best performing outlets of Parcos perfumes, Relay confectioneries and travel accessories, Guardian Pharmacy and Ethos watches. An industry report points out that the average SPSM per month of duty-paid outlets at the domestic terminal and international combined at IGIA is Rs 36,000, almost three times the average figure for downtown markets. On duty-free side, the figure is Rs 1,38,000.

It is estimated that the Delhi Airport gets almost 62 percent of its non-aeronautical revenue from retail stores, which have a compounded annual growth rate (CAGR) of 33 percent. Fabindia, for instance has over 200 stores in India and its per-square foot sales at Delhi and Mumbai airports are among the highest.