Indians fuelling a Rapid Surge in GTR

A great many Indians are taking to the skies, and how! Vacations now include spending quality time in places like Dubai, Singapore, Thailand, Europe and the US. And all this is translating into a big surge in global travel retail, especially when it comes to buying alcoholic beverages.

As Mandeep S Thukral, Regional Commercial Manager - GTR, Suntory Global Spirits explains, duty-free shopping has become an integral part of travel and it is the experience that counts. 

Mandeep believes that India's growing middle class, with increased disposable income, is driving a surge in demand for premium alcoholic beverages. This trend goes beyond just whisky and now encompasses premium craft gin as well. Exposure to international brands through travel and media fuels a desire for sophisticated flavours and established names.

There is also a growing interest in health-conscious options. This translates to a rise in specific country-origin wines, spirits with natural ingredients, and even premium gins boasting such qualities.

Moreover, improved air connectivity and affordability are leading to more frequent travel within and outside the country. The growing middle-class across APAC translates to more people with the means to travel internationally and spend money on travel retail purchases. With increased disposable income, Indians are poised to become a major travel spender, propelling India to become the fourth-largest travel market globally by 2030.

Strategic Moves & Hurdles

To keep pace with this evolving trend, product displays are changing rapidly globally and brands are looking at consumer engagement through sensorial, informational and gamification experience through permanent visibility. Sensorial appeal is the creation of motion content as a rich way to tell product stories and seduce consumers for the discovery and selection phase.

"Informational appeal, digital storytelling, usage of QR codes to connect to international websites with deeper information on product/ brand's storytelling, production and taste profile. Gamified interactions, interactive QR codes, and gamified quizzes with the possibility to help consumers/ travellers find the right product for gifting and self-gifting," Mandeep explains.

There are lacunae in duty-free alcobev purchase too, and in order to address them effectively, dissemination of the right information is necessary. Alongside limitations on the number of bottles or litres of alcohol which travellers can carry to their destinations, certain countries enforce strict liquor laws upon arrival.

These laws may include restrictions on alcohol consumption or the timings during which alcohol can be purchased. Such regulations can pose challenges for travellers transporting duty-free alcohol.

"Many travellers may not be acquainted with the specific laws of their destination country, potentially resulting in inadvertent violations and the risk of having their purchases confiscated," Mandeep points out while adding that in India, GTR allowance for inbound flyers is limited up to 2 litres of alcohol to the purchase value of Rs 50,000. Meanwhile, over the past decade, duty-paid shopping experiences have undergone significant transformations.

Duty-free Landscape

There certainly has been a difference in the purchase behaviour of both the inbound and outbound flyers over the past few years. As India's economic influence and global presence continue to grow, there is a noticeable surge in national pride. Outbound travellers take pride in showcasing exceptional Indian products like Indian single malts to friends and family. whether at home or abroad.

"Their focus often lies in seeking out exclusive products. limited editions. or familiar brands that may not be available in their destination country.

On the other hand, inbound travellers in India may find the duty-free pricing on alcoholic beverages in travel retail particularly appealing," avers Mandeep.

One of the reasons is that it renders them more affordable compared to local stores, although regulations and tax structures may vary. A key shopper motive here revolves around the availability of travel retail exclusives and attractive on-the-shelf activations of brands. Travel retail serves as a convenient option for travellers to stock up on specific brands of alcohol they enjoy.

He shares that modern liquor boutiques in cities such as Mumbai, Bangalore, Gurgaon and Hyderabad now boast expanded product ranges, including exclusive collections. There are no restrictions for shoppers to buy either in the number of bottles or in terms of the value. 

"The duty-free shopping experience is exempted from taxes and duties and shoppers can buy their duty-free favourite brands at attractive prices and can browse through duty-free exclusives as well," explains Mandeep. With more money to spend and an impressive change in lifestyle and 'status' value, buying duty-free brands has certainly taken off well. 

The Suntory Experience

"Suntory sees the global travel retail channel as a brand-building channel. It's a showcase channel for our brands where we can bring the best of the east meets west portfolio in the travel retail business. This includes Jim Beam and Maker's Mark bourbons, leading Scottish brands such as Teacher's, The Ardmore and Bowmore and a competitive advantage with Japanese whiskies such as Yamazaki, Hibiki and Toki Suntory Whisky," Mandeep informs.

The company also owns a wide range of brands such as Roku and Sipsmith in the gin category. It continues to focus on innovations and an exclusive range for travel retail shoppers.

As per Mindset data, brand ambassadors influence is highest amongst Indian shoppers worldwide. Young shoppers are fuelling premiumisation growth and they love to interact with brand advocates exploring new brands and categories. "Hence, Suntory has scaled up investments in hiring more brand ambassadors on the floor and most importantly investing in their training so that they confidently engage with shoppers on brand knowledge. Indian shoppers are looking at GTR exclusives and innovations," informs Mandeep.