Airports - the next battleground for retailers in India

Following in the footsteps of major transit points globally, both the Delhi and Mumbai airports now offer a good tenant mix and demand for retail space is expected to rise at other busy airports too. 

The current retail-tenant profile at Indian airports includes brands ranging from apparel to wellness, convenience, travel and books, electronics, fashion accessories, opticals/sunglasses, watches, jewellery, F&B, perfumes and cosmetics, wine and liquor as also travel accessories. More brands in these categories plan to expand by opening stores in airports too. 

The average store size varies according to the retail category. So while apparel stores can have a store size ranging anywhere between 500 sq ft and 5000 sq ft, bookstores have an average store size of 200-300 sq ft. F&B store sizes are generally smaller as common sitting areas are provided by the airports. In case the F&B store is not in a food court or has limited store formats, it may have a sitting area within the store or if in the food court, reserved for its patrons. 

Delhi International Airport Ltd (DIAL) surpassed the 48 million passenger mark in FY201516, witnessing a growth of 18% in traffic over the previous year. Also, Indian airports are witnessing tremendous commercial transformation through public-private partnerships, which is resulting in the development of such dedicated retailing areas. Retail developments such as Worldmark at Aerocity (near Delhi airport) are good examples of the potential for branded retail to come up around these facilities. It would be interesting to see if some other airports see similar developments in the future, like the upcoming international airport near Mumbai. 

Thanks to the increase in passenger traffic, it is expected that retail sales would also increase at airports in the future. Retailers need to get their product mix right and airports need to understand the dynamics of maintaining a good tenant mix. If this happens, the future for airport retailing in India looks very promising.