India's major airports have gone from drab to fab in just a few years.
Back in 2006, Delhi International had just a few grubby shops and a cafe run by grumpy workers who barely nodded at your coffee order.
Fast-forward six years and the new airport is the envy of many an overseas airport operator. It has dozens of high-end shops and restaurants along with the latest facilities, and it is seriously able to give its European counterparts a run for their money.
Delhi is not alone, as other Indian airports have improved their retail offerings to boost revenue after realising that there was money to be made from all those idle passengers waiting for their flights.
Revenue from airport retail in India reached US$1 billion (Dh3.67bn) last year, according to Asipac Projects, a retail consultancy based in Bangalore.
Two key aspects contributed to the growth of airport retail, the consultancy found.
"The newness of the concept - airport shopping - is one of the key drivers as it is a recent phenomenon in India," says Amit Bagaria, the chairman of Asipac.
"Also, the fact that domestic flights in India are often delayed, so people have extra free time at airports."
The shopping business at Indian airports is growing at 17 to 18 per cent annually and emerging as a viable opportunity for retailers and operators, the consultancy said.
India's $1bn of airport retail revenue is small change against global airport sales of $43bn. But India's turnover will surely increase because air traveller numbers are poised for staggering growth.
In 1999-2000, total domestic and international air passenger traffic across India was about 38 million, according to the Airports Authority of India (AAI). But in 10 years the figure climbed to 143 million and is on target to hit 450 million by 2020, says the AAI.
It's worth going after these passengers. Almost 2 per cent of India's population uses Delhi airport, and this 2 per cent accounts for more than 40 per cent of the country's wealth, according to the airport's operator, Delhi International Airport Limited (Dial). "Airports provide an opportunity to reach an audience which is young and affluent, a consumer of high-end goods and services and early adopters of new products and services," says a Dial spokesman.
"These passengers are increasingly wealthy, with greater disposable income available for discretionary purchases," says Binit Somaia, the South Asia director at the Centre for Asia Pacific Aviation (Capa). "Indians are inveterate shoppers. Indeed, survey after survey has identified shopping as their favourite holiday activity, but until recently the retail offer at Indian airports was virtually non-existent, and hence travellers spent their money overseas."
The gleaming shops in Mumbai and Delhi are a stark contrast to the country's undesirable airports of the past. But as recently as 2003, the government called India's airports "an embarrassment".
How did it happen? Back in 2006 the government decided to take action and allow private operators to develop Delhi, Mumbai, Bangalore and Hyderabad airports.
After multibillion-dollar upgrades, the situation improved dramatically. Along with new runways, terminals were built in all major hubs and the latest high-tech equipment was installed.
After that India's airport retail story really took on its wings.
"The move did and will continue to lead to improvement in the retail environment and the product offer leading to higher per-passenger revenue realisation for airport retailers across key airports," says Purnendu Kumar, the senior vice president of retail at the research company Technopak.
Lonely and drab-looking duty-free shops are no longer the way to lure passengers into parting with their rupees. Indians want to make their time in the airport part of the whole travelling experience.
"There has been a flurry of new retail categories that were previously not available at the airports," Mr Kumar says. "The new airports have seen the entry of specialist retailers helping improve the quality of retail offering, and there has also been more emphasis on design elements of retail outlets."
Indian airports have to offer visually attractive and competitive retail formats, with trained staff and a wide range of products and brands.
"It will no longer be sufficient just to offer whisky, for example," Mr Somaia says. "Instead, passengers will seek multiple brands within even the malt whisky segment. Greater options will also be sought in terms of lounge and business facilities, and entertainment such as videogames, cinemas, indoor golf and music zones.
"And as Indians travel overseas more often, they will come to expect Indian airports to keep pace with leading international hubs such as Abu Dhabi, Dubai and Singapore."
DLF Retail, which runs a clutch of outfits at Delhi airport, has signed joint-venture deals with international brands such as Mango and Boggi Milano, has listened to the advice and made its business succeed.
"We operate directly with retailers and leave it up to them to manage the shop independently," says a DLF spokesman. "So far, this seems to be working well, and we have nothing but good experience to report in terms of airport sales."
Indian airport operators have realised the importance of non-aviation revenue. Because of the huge growth in passenger numbers, there still needs to be an investment of about $30bn in airport infrastructure, Capa estimates.
Therefore retail could be one of the ways airports could finance their investment needs.
"The vast majority of the capital for such a development programme will need to come from the private sector," Mr Binit says. "Investors will seek a return on this capital, which will need to be supported by a strong revenue stream.
"Aeronautical revenue alone will not be sufficient unless set at very high levels. Non-aeronautical revenue, from retail, as well as other commercial and property ventures on airport land, will make an important contribution, representing probably more than 50 per cent of total revenue in due course."
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