Duty-free shopping in the city could soon become a reality. Other than the airport, the Delhi Duty Free Service (DDFS) is exploring the possibility of setting up an outlet within the city to boost sales.
However, the proposed shop will be limited to overseas travellers, embassies and expatriates, among others.
The off-airport duty-free concept, which is present in several countries, such as Thailand, the Philippines and Brazil, is another means of boosting sales.
In India, this will be the second attempt at setting up a downtown duty-free shop. Earlier, State-owned India Tourism Development Corp had rolled out one, but had to shut it due to poor performance and regulatory issues. “The downtown duty-free concept is an idea whose time has come in India. Our data shows that on several occasions, customers may be keen to shop but are unable to do so because of various reasons. This concept will allow them to shop within a specified time period at the duty-free shops present within the city limits,” Arun Barathi, COO, Delhi Duty Free, told Business Line .
Barathi said DDFS would be approaching the Central Board for Customs and Central Excise to seek its approval.
“The concept itself may not be an immediate success but we would like to start small. There are regulatory glitches and we will be seeking guidance on the same,” he said, adding that consumers for these downtown shops will, however, be limited to just overseas travellers, embassies and expatriates, among others.
Delhi Duty Free Services Pvt Ltd has the concession to manage the duty-free shops at the Terminal 3 of the national capital’s Indira Gandhi International Airport. The company is a joint venture between Delhi International Airport Ltd, Indian Duty Free Services and Aer Rianta International.
Speaking on its growth strategy, Barathi said the company was focusing on six key categories — liquor, confectionery, souvenirs, electronics, apparel and cosmetics. Asked if DDFS still catered largely to arriving passengers, Barathi said that this segment contributed about 60 per cent to its sales with the chunk coming from liquor.
The weakening rupee is playing havoc on budget travellers, according to DDFS. “Rupee depreciation may be cyclic but it has a dramatic impact on sales. People restrict their purchases. In such cases we have to ramp up promotional exercises,” he said.
Barathi added that it was also seeking to remove the restriction on use of the rupee for purchase at the duty. “Departure spending in the rupee is not allowed. Among our key wish-list is to allow spending in the rupee by foreigners. This will be big boost to sales,” he added.