AFRICA. Indu World International, which holds exclusive duty free contracts for the main international airports in Zambia and Djibouti, has revealed “aggressive” expansion plans for its presence in the travel retail industry across Africa. The company says it is cooperating with major international brands to take advantage of what it describes as “immense opportunities”.
The retailer, whose group of companies hold stocks in large bonded warehouse facilities in Jebel Ali, Dubai, and Rwanda in central Africa, told The Moodie Davitt Report in an exclusive interview that it is “ideally placed” to vastly increase its business in Africa, where its foothold is already well-established.
Vishvesh Lakhani, who co-founded Indu with his father Kishore in 2012, believes that prospects in Africa are often overlooked by the major brands. He says: “The typical African passenger has quite a decent budget to spend, and import duties are generally high in Africa, so they do tend to take advantage of duty free pricing while flying.
“We have the volume, and assets, to expand our operations in key markets, not least in Africa, where we are targeting more exclusive operator licenses in African airports” – Indu World International Co-founder Vishvesh Lakhani
“Certain categories like single malts, other high-end whiskies and cognacs are definitely growing due to air passengers looking to explore and pick up products which are not easily available in the domestic markets.
“Although tourism continues to grow quite moderately, and is held back by security concerns, the middle class on the Africa continent is expanding rapidly in most of the key markets, hence people are travelling quite a bit both inside and outside Africa.
“The way we see it, it’s an investment for the future, and once we get the product mix right there is definitely is some serious money to be made. Our sales have been consistently growing in Africa, and we confidently expect that to continue this year.”
Dubai-based Lakhani acknowledges that investment in duty free in Africa is some way behind other continents, which he says is “due to the mentality of the operators and vendors”. He adds: “We want to change this outlook by taking the first step and investing in our retail fit-outs so we can lead by example. We would really like to help change and shape the image that some brand owners may have on Africa.”
To back this up, Lakhani reveals that his company is currently transforming its facilities at Djibouti-Ambouli International Airport, where it has recently been granted an extension to its exclusive duty free operator contract until 2032.
Indu also plans vibrant new designs for Zambia’a largest airport, Kenneth Kaunda International in the capital Lusaka, where it was granted an exclusive duty free contract last year. Two brand new stores, one offering tobacco and liquor and the other perfumes & cosmetics and confectionery, will open in early 2020 at the same time as a new international terminal.
Lakhani says this second terminal was much-needed as the old terminal, which is being redeveloped for domestic flights only, was heavily constrained on the amount of air traffic it could handle.
Indu’s other travel retail interests in Africa include an exclusive agreement to sell duty free at Djibouti’s main sea port and a store on the Zambia/Congo border. It is also the sole duty free supplier to various military bases in Djibouti, supplying bottled water and beers, wines and spirits.
But it is the company’s bonded warehouse facilities in Jebel Ali and Rwanda that are the real drivers of Indu’s growth. From the former, where it owns more than one million square feet of warehousing space, it distributes stock from major wines and spirits brand owners to its own travel retail stores and those of other GTR operators in Africa.
“Supplying third party operators is a big part of our business,” says Lakhani. “We hold stocks of over 60,000 cases in Jebel Ali. The shipping lead times from the port in Jebel Ali to East Africa are roughly ten days and we have been very successful in this part of the business, working with various operators in that part of Africa.”
Looking ahead, Lakhani is seeking to build on the 42% year-on-year growth Indu achieved in 2018. “Naturally, it’s quite unrealistic to expect that kind of annual growth, but 2018 was an exceptionally successful year for us. We had a massive jump due to better supply chain planning, winning business in some new markets and some great supplier support.
“We have the volume, and assets, to expand our operations in key markets, not least in Africa, where we are targeting more exclusive operator licenses in African airports.”
He finishes by sending out a rallying call to major brands: “Let’s build quality travel retail in these emerging markets with key operators, who can provide brand growth and the security that brand integrity will be maintained.”
