Not Linking Road or Khan Market, Delhi airport is the best retail location for some luxury brands

19 Jan,2012

By Sagar Malviya & Kailash Babar


Can you name the retail location in India from where Swarovski, Marks & Spencer, Samsonite, Hidesign and Kimaya all reported their best sales numbers last calendar? Not Khan Market or Select City Walk Mall in Delhi, not Linking Road or the Phoenix Mall in Mumbai; it’s the Delhi airport.


Indira Gandhi International Airport in the capital is the most lucrative retail location in the country, having generated sales of 5,000 per square feet per month in 2011, which is almost four times higher than the second-best location. This figure includes sales from duty-free shops, but regular shops too are buzzing here.


“Our ticket size at airport is double in value compared locations elsewhere,” says Ms Ruchita Sharma, marketing operation manager of high-end crystal products maker Swarovski’s consumer goods business. The brand store at the T3 terminal of the Delhi airport ranks among its top stores by sales globally.


Retailers are at a loss to explain why a place meant just for travelling let brands rake in more moolah than most shopping malls and high streets.


Many of them are, in fact, surprised. A case in point is high-end fashion house Kimaya, which did not exactly expected hurried travellers to indulge in couture when it opened its outlet in the swanky international terminal in November last.


Its promoter Mr Pradeep Hirani says he had turned down offer to open a shop at the airport two times before saying yes the third time. “For us, it was more of exhibitional than commercial.”


Not any more. Today, Kimaya’s airport store sales are much higher than its high street outlets at around 3,500 per sq ft every month. And Hirani regrets having opted for a revenue-sharing model-where the retailer pays a percentage of its sales as rental to the airport operator-instead of the high rentals the airport had quoted earlier.


So what makes Delhi airport the most profitable destination for brands? One reason is its sheer size. It is the largest and busiest airport in South Asia. More than 35 million passengers used it last year.


It is the fourth largest retail hub in the country with sales of 1,200 crore in 2011 despite being ten times smaller than malls such as Ambience Mall in Gurgaon and Phoenix High Street in Mumbai. “For any retailer, sales-per-sq ft is the most important parameter while deciding on setting up their store,” says Mr Susil Dungarwal, chief mall mechanic at Beyond Squarefeet Advisory, a boutique mall consultancy firm. It reflects the profitability of an outlet as the per-square feet cost is comparable in most prime locations in metros.


Premium leather accessory brand Hidesign mopped up over 10,000 per sq ft per month on an average against 1,500-6,000 elsewhere, while Samsonite generated sales of 7,200 from the Delhi airport store compared to 1,350 in other stores.


Source:The Economic Times

Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved


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2 responses to “Not Linking Road or Khan Market, Delhi airport is the best retail location for some luxury brands”

  1. Prakash says:

    One of the most common shopping destinations in India, Mumbai is a shopper’s paradise.