BW Confidential - Issue #10 - May/June 2012 - (Page 72)

Travel retail Interview: DDFS coo Arun Barathi The star of India Delhi’s airport has seen its beauty offer transformed since Terminal 3 opened. Delhi Duty Free Services chief operating officer Arun Barathi tells BW Confidential about his strategy for the category by Kevin Rozario ndira Gandhi International Airport became India’s largest when the vast Terminal 3 was inaugurated in 2010. That opening also allowed a step-change in the shopping offer and terminal 3 is now seen as India’s most modern aviation hub. Retail operator Delhi Duty Free Services (DDFS), has been quick to expand under-developed and non-existent businesses like fashion, I luxury goods and beauty. According to DDFS, the retail strategy is focused on price and the range of the products offered, and beauty is a crucial component. India appears to have had some false starts in duty free over the years. How is the market performing? Delhi Duty Free is an outstanding example of what is possible in the Indian travelretail space. Last year was tremendous and this success is closely followed by a big jump in vendor confidence and conviction. Today perfumes and cosmetics contribute more than 18% of overall sales and the pie is growing. In addition to planning and implementing the 4P strategies well (product, price, promotion, people), a big factor has been our ability to properly manage the logistics side of the business in India, which has been the bane of many previous operators. How are fragrance and color doing? Fragrances continue to show strong growth and newness remains a key sales driver. Cosmetics are seeing steady growth, but it is very much about skincare. However, where there is growth in Latin American travelers and this supports the color business with brands such as MAC, Chanel and Dior proving popular. How does beauty compare with strong product categories like liquor? In the two years since we took over Delhi Duty Free, the beauty category has been breaking the stronghold of liquor. It will be a focus areas for us in the coming year. Having the widest choice of the world’s best brands all in one location, in a worldclass retail environment and at a significant price advantage over the high street are all factors that now drive our beauty business. Pricing is crucial in the beauty mix. How low do you go? We always try to ensure that the products we offer are competitively priced and we can safely say that these items are available at prices 35% below those in the domestic market. In addition, we and the brands have ensured that many of the collections available at our stores have been specially designed to suit the tastes and preferences of Indian and international travelers. Which products are in most demand? In terms of trends, EdP-strength fragrances dominate our beauty sales with brands such as Chanel, Dior, Calvin Klein, Giorgio Armani and Hugo Boss as the big movers. In skincare and cosmetics, it is lip glosses, lipsticks, eyeliners, eyeshadows and foundation that are most popular, with Chanel, Dior, Lancôme and Yves Saint Laurent proving to be the strongest brands. How are you ensuring that luxury beauty performs better? With increased disposable income and travel exposure, beauty brand awareness has improved greatly. In order to capitalize on this, our focus is not to try and reinvent the wheel but just to ensure that, in the immediate term, we do the basics right— the 4P strategy I mentioned before. It is very important that we stay ahead in terms May-June 2012 - N°10 - BW Confidential Indira Gandhi Intl Airport Passengers 2010/11: 29.94 million, expected 100 million by 2030 Current capacity: More than 46 million passengers Operator: Delhi International Airport Private Limited (DIAL), a consortium made up of GMR Group (50.1%), Airports Authority of India (26%), Fraport (10%), Malaysia Airports (10%), India Development Fund (3.9%) Growth Strategy: To make the airport a key international transit hub Delhi Duty Free Services (DDFS) Profile: DDFS is a joint venture company between DIAL, IDFS (Indian Duty Free Services) and Ireland’s ARI (Aer Rianta International). Concession: DDFS manages and operates the duty-free shops at Terminal 3 of Indira Gandhi International Airport in Delhi and is the single largest duty-free retail operator in India Retail space: More than 4,380m2 (47,145ft2) at 14 locations in the terminal 72

Table of Contents for the Digital Edition of BW Confidential - Issue #10 - May/June 2012

- Brand & retail news recap
- Companies on the move
Take note Market facts, figures & trends
Best of BW Highlights from our e-publication
Launches The latest in fragrance, skincare & make-up
Interview Clinique global brand president Lynne Greene
Insight: Skincare
- Category overview
- Retail technology
- Retail viewpoint
- The latest trends
- Spas & healthcare
- Spa case studies
- Inspiration from Apple
- Store concepts
Market watch: China
- Country overview
- Industry viewpoint
- Prestige retailing
- Taobao & the internet
Digital focus Social media strategies
Strategy spotlight Case studies to inspire
Travel retail: Asia Pacific
- Regional overview
- India
- Interview: Delhi Duty Free Services coo Arun Barathi
Radar Six up-and-coming beauty brands
- Make-up packs
- Innovation showcase
Last word Metis Insights director Stéphanie Morou

BW Confidential - Issue #10 - May/June 2012