INDIA. Prospects for retail, food & beverage and other commercial revenue streams at Mumbai Chhatrapati Shivaji International Airport’s all new Terminal 2 are examined in a major new study from The Centre for Aviation (CAPA) India.
CAPA is poised to launch the India Travel Retail Report, which provides strategic insights into the Indian market and incorporates the largest-ever survey of passengers, retailers, global brands and airport operators.
Mumbai International Airport Ltd (MIAL) last week called for external consultants to apply, via The Moodie Report, to assist in the planning of its retail, advertising and F&B mix at the all new Terminal 2.
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Click here to download the India Travel Retail Report and special readers’ offer |
CAPA’s report, which includes the results of an unprecedented survey of almost 8,000 travellers, will be published in collaboration with the Asia Pacific Travel Retail Association (APTRA). A special discount of US$2,500 off the official price is available to readers of The Moodie Report (click on icon for details).
Mumbai Airport, as well as nine other leading Indian airports, are covered in the report. It is designed to deliver a comprehensive perspective on the structure and performance of the sector today and the outlook for 2020, combining analysis of the aviation sector, interviews with key industry stakeholders and extensive consumer surveys and focus groups.
For more information please download the attached brochure, or contact Binit Somaia on bs@centreforaviation.com.
PASSENGER SURVEY OFFERS INSIGHT INTO MUMBAI PROSPECTS
CAPA said that its extensive passenger survey was designed to address the “paucity of research” that exists in a complex and dynamic sector. The survey was unprecedented in its scope and scale, covering almost 8,000 passengers across 10 key aviation markets, namely Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Kolkata, Pune, Ahmedabad, Cochin and Amritsar.
CAPA said: “We set out to capture the diversity of passenger profiles across Indian airports which vary by region of India, type of journey (domestic or international), stage of journey (arrivals v. departures), the nationality of travellers (India vs foreign visitors) and by market segment (business, leisure, labourer, VFR).
In the case of Mumbai, CAPA conducted the survey at both the domestic and international terminals, and for departures and arrivals. Some of the highlights of the surveys conducted in the international departures terminal at Mumbai CSIA include:
Categories: Alcohol was the category of interest to the largest percentage of passengers (43.6%), followed by books (31.6%), confectionery (24.1%), fragrances (21.1%) and cigarettes (16.5%). The average spend per transaction on alcohol was INR2,400 (US$46.35).
Categories which passengers would like to see more of include clothing, electronics, sports goods and cosmetics. Specific brands that were identified were Apple, Nike, Mac Cosmetics, and Sony. Within the fashion category, the most sought after brands were Guess, Gucci, Calvin Klein and Armani, with significantly higher requests for these brands in Mumbai than the national average results.
Purchase Intentions: A majority of passengers surveyed at Mumbai (65.4%) stated that they planned to visit the retail area in the airport, which was higher than the average across the country (57.0%). 29.9% stated that they find airport retail to be an enjoyable part of the travel experience. But only 15.9% had a specific intention to purchase something.
The most cited reason for not buying at the airport was to avoid having to carry more, followed by not finding a bargain. 25% of passengers that bought something said that the purchase was spontaneous with no intention or thought prior to coming to the airport (compared with 40.3% nationally). However, perhaps surprisingly only 1.3% said that they did so as a result of seeing a special offer or promotion.
Pricing: The airport retail offer was seen to be competitive, with 58.6% stating that they found prices cheaper than on the High Street. A significant 60.7% found Mumbai Airport prices to be on a par with other major international airports, with a further 13.3% judging it to be more competitive.
Nevertheless, as might be expected, 63.0% said that they would purchase more if there were further discounts available. But 39.3% stated that better customer service could have led to greater spend, highlighting a key need for sales and product training for frontline staff (this figure compared with a national average of 10.3% and may also explain the low rate of spontaneous purchases at Mumbai).
Food & Beverage: Up to 50% planned to visit a food & beverage outlet, with the most interest in fast food and sandwiches, with an average spend of INR418 (US$8.07). Only 16.7% sought out North/South Indian cuisine, compared with 40.1% nationally. Mumbai Airport rated highly in terms of satisfaction with the choice of food outlets (71.3%) compared with the national average (46.6%).
Inflight and offshore sales: Only 3% of passengers planned to purchase duty free inflight, and 15.5% intended to buy something at their transit or destination airport rather than in Mumbai. The main reason cited was to be able to carry the goods for a shorter distance (56%), but other reasons included a greater choice of products, lower prices and greater familiarity with that airport.
Currency: Foreign exchange was an area in which airports across India are seen to be uncompetitive, as a result of which only 10.5% of passengers utilised bureau de change services at the airport, of which 83.5% did so for convenience.
Pre-Purchase: The concept of pre-ordering purchases for collection at the airport is still to take off and although 31.7% of passengers stated that they regularly shop online, only 12.4% expressed interest in pre-ordering duty free online.
Passenger Facilities: Additional passenger services which were of most interest included massage chairs, shower facilities, sleeping pods, a movie theatre and an excess baggage courier centre.
MUMBAI: STRATEGICALLY IMPORTANT, STRATEGICALLY CHALLENGING
CAPA concluded: “Mumbai has many of the characteristics that should make it the jewel in the crown of Indian airport retail concessions. But the issue of constraints on traffic growth, and perhaps even more importantly, that of traffic distribution when the new airport opens, will have a significant influence on the retail revenue potential.
“This does not necessarily make the opportunity less attractive, as stated Mumbai is an exciting consumer market, but maximising returns will require strategic innovation, an in-depth understanding of the prospects for aviation development in the city and detailed research on consumer preferences and behaviour.”
INDIA’S MOST LUCRATIVE RETAIL MARKET?
CAPA commented: “Until recently, Chhatrapati Shivaji International Airport, gateway to the country’s commercial and financial capital, a metropolitan region of 20 million, was India’s busiest. The city is the headquarters for more of India’s listed companies than any other, which accounts for the fact that the city reportedly contributes 40% of the income tax collection across the country.
“The consumption potential of the market is very strong both in terms of middle class and high net worth individuals, a positive driver of traffic and spend per head. According to Forbes, in 2011 Mumbai had the sixth highest number of billionaires of any city in the world. CAPA spoke with several country heads of foreign carriers, who confirmed that Mumbai has the strongest premium market – although Delhi is seen to be catching up fast.
“This is reflected in the fact that Mumbai Airport has the highest proportion of international first and business class seats in the country at 12.7% of capacity.
“Market data suggests that Mumbai CSIA should be one of the most exciting airport retail opportunities in the world. India’s traffic growth and Mumbai’s consumer profile make for a compelling combination. But, only one of these drivers will be available beyond the short term.
“The primary challenge for Mumbai CSIA is that the airport is approaching saturation. The modernisation of the airport has been extremely challenging due to it being one of the most land-constrained airports in the world measured by passenger traffic per acre of land.
“Mumbai Airport has just 36% of the land area of Delhi Airport despite having comparable traffic volumes. The operator has managed to deliver significant improvements to the existing facilities, whilst simultaneously handling strong growth in traffic and constructing a massive new terminal T2, despite having virtually no room to move.
“When T2 opens in 2013, this integrated domestic-international terminal, which will have capacity for 40 million passengers per annum, will finally bring world class facilities to Mumbai.”
POSITIVE RETAIL PERFORMANCE
Commenting on current retail trading at the airport (where DFS and Flemingo in joint venture currently run the duty free), CAPA said: “A variety of stores have been opened and the results have been positive. Domestic retail has also improved after changes were made to the terminal layout to provide greater visibility to the new stores.
“Mumbai generates 55% of its retail revenue from Arrivals, compared with 70% in the case of Delhi, which is interesting in that Mumbai has a higher proportion of Indian nationals passing through the airport (70% compared with less than 60% at Delhi) who tend to purchase on their return home.
“The high share of Indian passengers is one of the reasons why it is not possible to simply transplant international concepts into the market;, it requires careful research into the key drivers of consumer behaviour, particularly in light of the vast differences in the travel experience of passengers through the airport. India has high net worth individuals who travel overseas several times a year, but there is, and will remain so for many years to come, a large cohort of passengers who are only just starting to travel overseas for the first time.”
