Flemingo Travel Retail plans arrivals upgrade in Mumbai and opens second border shop in India

INDIA. Flemingo Travel Retail is planning an expansion of the duty free arrivals store it manages under the Mumbai Duty Free retail brand at Mumbai Chhatrapati Shivaji International Airport. The company has also recently unveiled its first Victoria’s Secret boutique at Mumbai International, is planning much-enhanced space in the new terminal at Chennai Airport, and has opened a new border shop on the India-Bangladesh frontier (see below).

He said: “Mumbai Duty Free is a mature business but we can bring more to it. The major differentiator will be how we drive arrivals sales. Since 2014 we have updated arrivals three times already but still it can be improved. We are going for a refurbishment in early 2020 and plans to add 3-4,000sq ft of additional space, elevating the overall arrivals footprint to 30,000sq ft. The project should complete by mid-2020.”

Driven by returning Indians, the arrivals channel accounts for around 70% of the duty free business at Mumbai International.

“Indians tend to buy more in arrivals and that will continue. But we have seen growth in confectionery and P&C also in arrivals so it is not all about liquor. We see more engagement, more trading up in P&C. There is also a growing business in small accessories in arrivals, all of which can build the allowance value. Plus we are examining our wine offer and how we can improve that in arrivals. Many people don’t maximise that allowance so we are looking at engaging them in new ways. We have done a lot of research to understand shopper motivations and that will lead us to tailoring our messaging and offers to them.”

Across both arrivals and departures, Mumbai Duty Free plans to lift its emphasis on opportunity categories, among them consumer electronics and watches.

“We see electronics and watches as part of the future, both in arrivals but also departures,” said Thimmayya. “We have access to many of the top brands in electronics and in both this and watches we can offer our -15% discounts through our partnership programme, for example with Citibank. We will push watches towards a more premium level.”

He added: “P&C is growing and we are taking on new brands, most recently Kiehl’s and NARS for example; the latter is not available downtown yet. We are talking to other brands about their high-end beauty ranges to elevate the offering.”

Digital marketing and online pre-order have become vital channels through which to engage consumers and lift spends, he added.

“Until now we have only had web pre-order for arrivals sales but now we have piloted a pre-order for pick-up in departures too. Also, we have gone beyond the core category offer and made fashion & accessories available for pre-order for the first time. That is very encouraging.”

The momentum behind marketing at Mumbai Duty Free was boosted by the retailer’s Whiskey Festival in October. The campaign, which targets Diwali and festive shopping, runs in Terminal 2 arrivals and departures stores and continues until December.

It features leading brands including Johnnie Walker, Glenfiddich, Jack Daniel’s, The Macallan, Chivas Regal and The Glenlivet. Taiwanese whisky is also highlighted; and customers are also encouraged to sample super-premium spirits such as Talisker 18yo and The Singleton 18yo. The festival offers shoppers discounts, cash-back deals and the opportunity to win an overseas trip, including a visit to The Glenlivet distillery in Scotland.

The Festival launch coincided with the next phase of the popular ‘Mumbai Duty Free is now free’ campaign, which has run for several years. Through this, shoppers can earn discounts and rewards through Mumbai Duty Free partners that effectively make their shopping ‘free’.

Partners brands this time include MakeMyTrip, which offers discounts on domestic and international flights and hotels; Gourmet Pass, which offers exclusive deals on restaurants and clubs; a luxury supermarket store called Foodhall and Tripxoxo for booking international experiences at a discount.

Other regular partners include Citibank, Vodafone, China Union Pay and more.

Thimmayya said: “With Vodafone we are trying to reach the traveller before they come to airport. We encourage them to stop by and shop, Vodafone geotargets travellers so that they get exclusive Vodafone offers which we facilitate within the airport.

“There are other partnerships that help the consumer on their journey. We have a partner that specialises in visas for overseas travel through a premium service and which has a loyalty programme. We have tapped into that by offering gift cards from Mumbai Duty Free, we can send reminders to their members and offer them something special.”

Thimmayya said the new initiatives had helped convert more travellers into shoppers even in a testing period, with the collapse of Jet Airways in April and a sharp fall in traffic.

“In the last few months we have seen arrivals pre-order driving a lot of the sales. We have done cross-category promotions that have helped, and encouraged multi-category buys, especially in liquor and P&C. We have driven traffic into confectionery more than ever too. We have managed to grow spends by +10-12%, with penetration up +1.5%.”

New frontiers

Beyond the core business, Mumbai Duty Free has also extended its fashion & accessories portfolio with the opening on 15 October of a Victoria’s Secret boutique in Mumbai T2. It is the first store from the brand in Mumbai, with consumers responding positively so far, said Thimmayya. Fashion & accessories can be challenging, and we are still learning but it does represent an opportunity. We aim to sign up more brands.”

Elsewhere in India, Flemingo Travel Retail is expanding its airport space and has a new border store venture.

At Chennai International, a new terminal should open in 2020. This will offer around 20,000sq ft for duty free, which Flemingo will operate under its continuing contract that runs to 2024.

Thimmayya said: “We only have around 5,000sq ft of space today, which is not all that well located. So this gives us the chance to add more categories and brands.”

In October Flemingo opened its second Indian border store, this one in Agartala on the Bangladesh frontier. Its other shop in this channel in India is on the Pakistan border. Thimmayya said: “We see borders as an opportunity to explore in the years ahead. We are looking at other locations such as Myanmar or Nepal.”

In his new role Thimmayya also oversees the Flemingo business in Sri Lanka, which he previously headed from Colombo.

The tourism business remains affected by the impact of the Easter bomb attacks in the country, and remains “extremely challenging,” acknowledges Thimmayya.

“While some traffic has returned, the Chinese have yet to come back. They contributed nearly 50% of P&C sales in departures at their peak. Traffic overall is around -11% down and we are around -5% versus last year. There is a plan to upgrade the airport, including taking immigration points to the shopping arcade level from the ground level and then relocating shops and the flow of traffic. But the details and timing are yet to be finalised.”

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