Indian spend up by 27% in 2007

Emily Pacey

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The outbound Indian traveller is spending more than ever, but tends to avoid duty-free shops

The average Indian outbound travelling consumer is male, likes electronics and confectionery and prefers not to shop in overseas duty-free airport shops, according to research by AC Nielsen.

The market research company’s assistant director India, Sanjeev Chowdhury, revealed the results of the latest study into the Indian traveller to attendees of the research breakfast workshop at the TFWA Asia Pacific exhibition this morning (May 18).

Interviewing 18 to 60 year-old Indian citizens who had travelled internationally at least once during the past 12 months, AC Nielsen found that the average spend per passenger increased by 27% in 2006 compared with 2005, reaching €891 ($1,205). The gender divide between Indian travelling consumers is 57% male and 42% female, while citizens of Mumbai are the highest spenders, spending about €1,220 ($1,650) on consumer goods while travelling.

However, research found that 56% of travellers prefer not to make their purchases in duty-free shops, mainly due to the perception that duty-free does not offer value for money. AC Nielsen divided those surveyed into four main types, including bargain hunters and status, pleasure and adventure seekers, with bargain hunters and status seekers the biggest groups.

Fragrances and cosmetics were the most popular categories, with 68% of Indian travellers preferring to buy these products. About 60% said that they were most interested in buying electronics, while 53% preferred fashion and accessories and 52% preferred confectionery. About 47% were most interested in buying watches and jewellery, while 43% prioritise the liquor category. Glassware and fine gifts were prioritised by 34% of those surveyed, while about 32% said tobacco was their favourite category and 17% prioritised local souvenirs.

Confectionery was the best-selling category for outbound Indian travellers in 2006, according to AC Nielsen’s research, closely followed by fragrances, then fashion, leathergoods and cosmetics.

Indian travellers preferred to buy beauty products by Gucci, Dior and Chanel, electronics items manufactured by Nokia, Sony and Panasonic. Gucci, Guess and Armani were the most popular fashion and accessories brands and Citizen, Omega and Rado were the most popular brands in the watches and jewellery category. Marlboro, 555 and Benson & Hedges were the preferred cigarette brands, while Cadbury, Nestlé and Dove were the top three confectionery brands. By far the most popular brand in any category was Johnnie Walker, with 64% of those surveyed saying that this was their preferred liquor brand.

The study found that there is no clear correlation between destination and category, but that there are opportunities for cross-selling across categories. Over 70% of those buying liquor and wine also buy beauty products, while tobacco buyers also spend in the liquor and beauty categories. There was also a strong correlation between buyers of fine gifts and beauty products.

Chowdhury observed that there is a gap between Indian travellers' perceptions and expectations of duty-free shops. They tend to respond well to sales assistance, and find that duty-free shops are under-staffed.

About 32% of respondents were not aware of the security restrictions placed on liquids, aerosols and gels, but 60% claimed that they would not change their shopping behaviour because of the new rules.