The Sunday Times
By: Huang Huifen
.
It is 7pm on a Friday and more than 200 people are queuing for a chance to buy an iPad at 30 per cent off. Those who succeed immediately rip open the box to admire the results of their hard work. After all, they have been here as early as 6am and endured teeth-gritting suspense to be among the first 150 buyers to get the iPad deal. Next to the snaking queue, little girls in princess-like dresses are getting their faces painted with thick make-up and their hair teased and topped with tiaras to look like their favourite Barbie doll for a photoshoot.
This is not your typical mall in Orchard Road or the heartlands, but the sleek Changi Airport Terminal 3. The promotional events were held two weeks ago at Basement 2 of Terminal 3, where familiar brand names such as Poh Kim Video and fashion label Cotton On exist alongside the usual airport retail staples of a foodcourt, eateries, a personal care store and a supermarket. As a result of events such as these and the stores there, the airport mall has taken off with locals who go there without any intention of taking off.
LifeStyle visited the airport that weekend and found the foodcourt, playground areas and carpark as packed as any mall in the city. Terminal 3’s Basement 2 is accessible to the public, and the crowds, made up of families and airport staff as well as Singaporeans waiting for their flight or who had just touched down, were concentrated there. Its popularity raises the question: Has world-class Changi Airport veered off the runway and become too much of a mall with its aggressive marketing efforts and deals to attract non-travellers to shop in its public areas?
New Delhi business traveller Rohit Goyal, 38, who travels to Singapore for work every two months, thinks so. He was intrigued by the Barbie event when LifeStyle spotted him on the fringe of the stage area that day. “Why would they have a children’s make-up session at the airport?” he said. “I find it very strange as there are no schools around here and passengers will not have time to let their kids queue for this. I have not been to airports with such events in the public area.” He added: “I came early to the airport just so I can relax and have a meal before my flight. I did not expect the crowd here, plus the music from the Barbie event is so loud.”
Another tourist, Australian Wendy Parker, 56, who was about to check in at Terminal 3 for her flight to Tasmania, said: “There are so many posters telling us about the shopping deals but not many informing tourists that they can get a GST refund here. If I had seen these posters, I would have kept the receipts of my purchases.”
In February, in a move to market itself as a shopping destination to non-travellers, the Changi Airport Group announced that all shops in the public areas of its three terminals would absorb the 7 per cent goods and services tax. Previously, the GST absorption scheme, introduced in 2008, was limited to Terminal 3’s public and transit areas. Frequent promotions, such as the iPad deal which was part of an airport-wide shopping programme launched in May called Fabulous Fridays Deals, are a norm across all terminals.
In this, shoppers who spend a minimum of $30 using their Visa credit card are eligible to buy a range of monthly themed products ranging from children’s items to lifestyle gadgets to fashion apparel at up to 90 per cent off starting every Friday. The bulk of the items for sale, however, are found in the transit area. The programme ends on Nov 30. The Barbie dress-up event required parents to spend a minimum of $10 at the airport. It is part of a monthly Meet & Greet session in which the airport organises activities where kids can interact with characters such as Barbie and her boyfriend Ken.
It is not just discounts that are attracting shoppers. Family-friendly facilities such as a four-storey slide in the public area in Terminal 3 and a new indoor playground are bringing parents such as housewife Jann Tay, 37, to the airport. The mother of three brought two of her children aged nine and five to SingKids PlaySystem, an indoor playground which opened in May in Basement 2 of Terminal 3. “I like that I can shop while my children play in the playground. We also came here because it is less crowded. I think the family-friendly concept is what makes the airport attractive,” says Ms Tay, a Hougang resident.
The marketing and branding efforts have taken off. In May, the airport registered an average footfall of about one million visitors to Terminal 3’s Basement 2 each month since last December. These visitors include travellers, people meeting or sending off friends and family and plane spotters.
While there is no breakdown of figures of the profile of the one million visitors each month, shop owners tell LifeStyle that the bulk of their customers are Singaporeans who are at the airport just to shop. Mr Lim Chee Yong, managing director of Poh Kim Video, who opened a new branch in Terminal 3 Basement 2 in July, says 70 per cent of his customers who buy DVDs are non-travellers with the rest being Singaporean travellers and foreigners. He decided to open an outlet in the basement because he likes the concept of a mall in the airport. “When people are in an airport, they tend to be in high spirits and will buy more products from us. Plus, the airport is spacious and draws families to come here, especially with its easy parking,”he says. He estimates that he sells 3,000 DVDs a month in Changi, which is just 20 to 30 per cent lower than his other 25 outlets across the island. The rent at the airport is also “more reasonable”.
A Changi Airport Group spokesman says that more shops, promotions and roadshows are held at Basement 2 of Terminal 3 because it has the largest area compared to the basements in the other terminals. “Terminal 3 is unique because it has a large basement which is also away from passenger flow,” he says. And it is not just the promotions and retail mix that is drawing the crowd to the public area.
The spokesman notes that increased passenger traffic passing through Changi Airport has contributed to the crowded public area, too. He says: “The level of activity at Changi Airport has increased significantly in the last two years primarily due to very strong growth in passenger traffic. July this year was the busiest month ever for Changi Airport, with 4.17 million passengers passing through. The vast majority of passengers also use facilities in the public areas, along with those who are here to meet them or send them off.” But why the same tenant mix – think Bata, Poh Kim Video, The Body Shop, Cotton On and Candy Empire – like that of any mall in town?
The spokesman narrows it to three reasons: To give a wider range of products and services to visitors, a case of “willing buyer, willing seller” and catering to the needs of the 28,000 workers in the airport such as customer service agent Jade Sabado. Though Ms Sabado lives in Pasir Ris, she buys her groceries from the NTUC FairPrice supermarket at the airport because all the shops near her flat are closed by the time she knocks off work at 1am. Changi Airport’s mall-and-airport retail concept is actually not unique.
Hong Kong International Airport, for example, has 98 per cent of its 80 retail and 20 food outlets situated in the non-restricted area in its Terminal 2. There are also entertainment zones in the non-restricted areas with attractions such as an interactive sports games centre and an Asian movie-themed interactive exhibition hall. The airport also holds non-travel related promotions such as discounted fares for students in its entertainment zones in Terminal 2 and free three-hour parking with a spending of more than HK$300 ($47.80) in Terminal 2 in one day.
Just across the Causeway, new budget airport Kuala Lumpur International Airport 2, set to be completed next October, will have 70,000 sq m of shopping area and more than 200 shopping outlets, and is reportedly the largest airport shopping mall in the world. While it is not clear how many shops will be in the public area, Malaysian daily The Star reported that the airport will also “serve as a shopping area for Sepang residents”.
In comparison, Changi Airport has more than 70,000 sq m of retail space across all terminals, and the retail space in the public area makes up about 20,000 sq m.
The robust retail strategy, be it in the public or transit area, is a step in the right direction, says Mr Albert Tjoeng, assistant director of corporate communications at the International Air Transport Association, an international industry trade body representing 230 airlines globally.
An airport gets its revenue from two main sources, aeronautical and non-aeronautical. Aeronautical sources come from aircraft landing, parking and aerobridge fees, and passenger service charges. Non-aeronautical fees come from retail and rental of its spaces. “The more commercial revenue an airport can generate, the less the pressure to increase revenue through aeronautical sources by increasing charges on airlines, hence it keeps the airport competitive,” says Mr Tjoeng.
For the last financial year, Changi Airport’s revenue was $1.45 billion, with non-aeronautical fees making up more than half of the revenue. Money matters aside, does marketing an airport as a destination for non-travellers pose any security risks, especially in the post 9/11 climate?
“Not necessarily,” says Ms Susan Sim, vice-president for Asia with The Soufan Group, a global security consultancy. “There are different layers to airport security, such as clearly demarcated zones where only those with air tickets are allowed. There are also regular security patrols to deter terrorists. Airport staff and even cleaners are also trained to look out for suspicious behaviour and to alert the security authorities.”Unless there is intelligence indicating a possible attack, you cannot lock down an airport for security reasons. We have to remain alert and practise what the experts call situational awareness but not get paranoid and simply stay home,” she says.
Mall or not, Changi Airport will always be a place where Singaporeans visit, regardless of whether they have a plane to catch. Undergraduate Lauren Jacob, 24, who was among the first few who queued for the iPad that Friday, says: “I visit the airport for many reasons, be it to travel, send off friends, hang out or queue for a good deal. Having so many promotions and retail options in the airport does not dilute our world-class airport image. My friends from overseas always say that our airport is so convenient, because you can always get something no matter the time of the day.”