DFS aims for more footfalls in duty-free shops

DFS India, which owns and operates Mumbai Duty Free, aims to cut out competition by introducing discounts in a big way. The company said it would create downtown association with brands to provide value to its customers through vouchers and discounts.

“Over the past couple of years, discounting pressures have been created in the industry. A customer of ours has a choice of buying from us or from other duty frees. Our revenue is largely from in-bound travel, with close to 67 per cent of the business coming from there. Most of our buyers are Indians and they tend to buy while coming back to the city,” Manishi Sanwal, Managing Director of DFS India, told BusinessLine.

Sanwal said that with an eye on such consumers, DFS was collaborating with many brands to ensure a pipeline of discounts.

“The idea is that if a customer buys for $100, we will ensure that he gets back the same value through discount vouchers. Our partners will include banks, online retailers such as Myntra, even travel booking platform. We are making tie-ups, which will add value to the customer’s purchase,” he added.

Sanwal said that DFS plans to make this a continuous scheme. “We will have a full-fledged team which will ensure that customers get value on their purchases,” he said, adding that the partners will change from time to time.

The duty-free shop segment in India is valued at around $500 million while globally, it is worth around $60 billion.

Asked if this will rev up footfalls, he said, “We expect this to bring us more customers. We are a profitable venture. Mumbai has one of the highest footfalls. We are growing in double digits.” Mumbai Duty Free is operated by Flemingo. DFS operates some shops in Delhi airport too. Flemingo runs the largest network of duty-free shops in the country, including Kolkata and Chennai airports. It is also operating in non-metro airports such as Chandigarh and Kochi.

DFS operates 65,000 sq ft space in Mumbai airport with 13 fashion stores, three large duty-free stores and one packaged food outlet.

Last year, the company had introduced the ‘click and collect’ model, enabling a departing passenger to pre-order and then pick the purchase on return trip.

Sanwal said compared to other international duty frees, liquor had a significant price differential. “We have the largest liquor store with close to a hundred single malt brands,” he said. Data from Centre for Aviation states that liquor leads the duty-free category in India, accounting for 63 per cent of sales, compared with 17 per cent globally.