Speaking in a segment at the TFWA Asia Pacific Conference & Exhibition in Singapore during the annual Exhibition and Conference on 12-16 May 2024, the Singapore Management University professor Nirmalya Kumar outlined how “India is an attractive market and still relatively underpenetrated by global chains relative to its potential”.

Kumar pointed out that, while some consumers may still perceive duty free drinks as cheaper, the fcat is that today this is only true for a selection of highly-taxed items and insisted that in India duty free prices are among the highest which means that companies need to tap into buyer motivations and look at elements other than the price to change direction and this will be critical for success.

He said the marketers need to tap into buyers. According to sources, India expects outbound departures by Indian residents to increase from 17.4 million in 2019 to over 50 million in 2030. With their propensity to buy expensive products but at a reasonable price, they would increase their spending, especially wine and alcohol which otherwise attract a very high duty; not to talk of equally high excise duties and VAT of around 25%.

There are several constraints to be cleared to make shopping at duty free shops fun. Delivery at the arrivals was restricted to cash at delivery counters in India. But with the credit card business booming the assumption by the learned professor has no legs to stand when he says that the drinks companies should accept cash on delivery since 1-2% Indians only use credit cards. Today, the long lines at the entrance of the business lounges waiting for their turn to enter the lounges by swiping their eligible credit cards is also an indicator that getting business cards of higher limits is within the range.

In addition to  the travel and airline business in India is also reported to be booming and, in the next five years, domestic air traffic is expected to double, according to Kumar, while the number of airports will increase from 150 to 200 presenting drinks brand owners working with global travel retailers with a big opportunity to not only boost sales, but also presence and brand awareness in the consciousness of the Indian consumer.

Subhash Arora