Flemingo Dutyfree Shop, which operates stores in a dozen of India’s 16 international airports, is stepping out.
The Dubai-headquartered retail chain plans to set up 23 duty-free stores mostly in the country’s big cities, investing up to Rs150 crore this year, a senior executive of the company said. The decision to set up shops outside airports is to spread awareness of the retail brand in India.
“Some 60% of our sales comes from wine and tobacco, but there are government restrictions on advertising them, which is why with the city stores we hope to get more visibility,” said P.K. Thimmayya, vice-president of business development.
Flemingo stores generated Rs80 crore in revenue from its Indian outlets last year, about 45% of its global turnover.
A dozen of the new Flemingo city stores—branded Flemingo Downtown shops —will be in India’s metropolises and tourist hub Goa.
Flemingo is in talks with an Indian retail partner, who Thimmayya declined to name, to share ownership in some of the stores. “The modalities will be finalized within the next one month,” he said.
Flemingo will 100% own four other ‘commissary’ stores and seven ‘non-resident Indians’ (NRI) retail outlets.
The commissary stores will be targeted at resident diplomats in India by making it easy for them to secure products, sometimes in bulk, bypassing complex government rules.
“Diplomats are entitled certain quotas and allowances depending on their rank...for certain products like food and beverages, electronics, liquor and tobacco. In the absence of such diplomat-focused stores, these products are imported, which are costly and need a lot of paperwork,” Thimmayya said. Customs officials present at these stores will make paperwork easier for diplomat customers, he added.
The NRI stores will be aimed at the nearly-three million NRI-population visiting the country.
The Downtown stores will allow foreigners and visiting NRIs to browse through merchandise at an outlet outside the airport and purchase them. “A customer can touch and feel the duty-free products at these shops, and place an order. And, then pick them up at an airport shop where they will be packed and ready at a counter at the departure terminal,” Thimmayya said.
However, resident Indians will not be able to shop at the Flemingo commissary, NRI and Downtown outlets.
Attracted by a 16% growth in international passengers in India, a handful of new players have entered the duty-free shopping business in the past year: Shopper’s Stop has partnered Switzerland-based Nuance Group at the new Bangalore international airport, Future (Pantaloon) Group with UK’s Alpha Airport for an outlet at the Delhi airport, and state-run ITDC and Spanish retailer Aldeasa recently won the bid to set up duty-free shops at Mumbai’s Chhatrapati Shivaji International Airport.