Malaysia Airports builds shopping experience amid rising focus on commercial income – 07/11/05

MALAYSIA. Malaysia Airports Holdings Bhd (MAHB) is implementing a new strategy to enhance the attractiveness of its retail outlets at Kuala Lumpur International Airport.

Speaking to The Edge Financial Daily, MAHB Chief Executive Officer Datuk Bashir Ahmad said the airport authority has engaged a UK consultancy to examine more effective methods of optimising the available retail space at the main terminal building.

He said the exercise was designed to maximise retail earnings and give KLIA a competitive edge over other international airports, especially those within Asia.

The report said that the three designated areas for primary development are the satellite building, domestic contact pier and main terminal building. Works at the domestic pier, where MAHB plans to open the “˜Flying Emporium’ with a retail space of 1,600sq m, would be completed before Christmas, he said.

The retail space at the satellite building is to be segmented into four zones: luxury brands, contemporary lifestyle, gifts & basics and great deals.

Bashir said that MAHB has to look beyond relying on airport charges on airlines and airport taxes on passengers. Instead it must optimise income from commercial retail space and advertising.

He said that commercial retail income currently represents 35% of revenue but that it should ideally be 50%. He said that liquor, cigarettes, perfumes and chocolates top the shopping list of travellers.

Bashir said it is imperative that certain high demand products be strategically located to create a better shopping experience.

“Those wishing to purchase liquor and cigarettes will go the mile to look for them, so even if they are located at the back it does not matter,” he claimed. “But there have also been requests for other items like toys, bigger book shops and good restaurants, and these must be addressed.”

He said that many major international airports have a retail walkthrough concept that increases passenger comfort and retail income.

Bashir said that MAHB is in talks with several top-notch booksellers and other high-end product retailers. It is also exploring other innovative sales approaches.

Price will be key to the new approach he promised. “If we created a shopping environment where travellers knew they could buy quality products at cheaper prices, then a passenger waiting to board his or her flight would be encouraged to browse around and shop,” he told the newspaper.

Bashir said the works are expected to be completed by the middle of next year.

Food & Beverage The Magazine eZine