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Sunday, July 31, 2016

Curious case of inflight free gift and shopping!

Indian Bloggers
You've seen lots of photos in previous posts. Let us do some introspection about in-flight shopping in this post.

It always feels good to win something and few shopping companies have mastered this art of deception to make people buy overpriced, unbranded items in the air, under the name of free gifts.

There are a few companies in the world which run shopping in the air- they tie up with airlines to distribute a catalog of items, which customers may review during their flight and order the same. Many of these catalogs claim the items are way cheaper if ordered in air, than on ground, which is seldom true. They also claim to offer a free gift to lucky winners, provided winners pay Rs 999 towards handling charges.

Let us first look at the free gift part.

Ava SkyMart is one such company that runs sales in flight in JetAirways and few other airline flights. Along with meal tray, a small booklet is supplied to each passenger. The booklet includes a list of items that one can buy and also a peel and win option, in which passengers tend to win some items, but they need to pay Rs 999 towards handling

Here is the tricky/unethical part of it
1. Everyone is a winner- There will not be a single booklet that says "Sorry, you won nothing". Every booklet offers something or the other
2. MRP of the product is shown 4-5 times higher than current retail price to create a false sense of "huge saving"
3. Most of the items are from brands you hve never heard before. These brands won't have any significant presence offline and it is near impossible to compare their current selling price or avail any after sales service, let alone check for reviews from existing customers.
4. If a product is worth Rs 1000, taxes will be to the tune of 10-15% max and shipping expense of about Rs 50-100 usually. but try telling that to the counter staff and demand explanation why you should pay Rs 999- they won't explain.
5. The Rs 999 taxes, handling charge etc almost always same as or greater than the value of the product itself. There is no option to skip this handling charges, even you are willing to go directly to the factory of manufacturer and collect it, so that Ava doesn't incur any shipping/handling expenses :)
6. This booklet could be given along with boarding pass so that passengers have enough time to evaluate and buy but NO- doing so would give passengers enough time to compare price, speak to their friends etc and their chances of buying anything drops to zero. If given in-flight and if asked to collect soon after arrival, probability of passengers realizing in time that they have been tricked is very low.
7. It is not clear how refund/replacement process works if product is found to be defective after you leave the airport.
8. Also more than one item is listed as 'won'  usually one item that appeals to men and another to women etc, so that everyone has high probability of liking whatever they "won". I went through this circus four times during my Chennai-Jodhpur and return trip last week. In one leaflet it was generic that I am entitled to pickup "Any item in the leaflet" - what a huge favor!. I am sure they will have no issues if you want to win every item on offer, as long as you are willing to pay Rs 999 per item.

Earlier it was scratch and win- we had to look for a coin or something and scratch it. Now it is made easy with peel and win. Probably they can replace the peeler and reuse. But I doubt the commercial viability of re-using them (airline staff won't have time to check which one is in good condition for re-use vs which all have to be discarded as they are damaged in contact with food, water etc from meals tray. If you are buying something in-flight, you are effectively compensating the operator on behalf of 1000s of others who never bought anything but still incurred a cost to the company.

What has been your experience with these in-flight free-gifts with expensive handling charges? It surprises me that some people are running a whole company with an idea that they can trick people into buying stuff under the name of free gifts. Running this free gift-in-flight shopping operation is not cheap- it has several expenses:

1. Cost of operating kiosks in various airports- Airport rental, staff salary, other overheads- they need to run these across several airports -at least main ones- in India to have reasonable business volume. Operating a kiosk inside airport will be 3 to 5 times expensive than running the same inside the city.

2. Amount to be paid to airlines: I doubt if airlines facilitate this for free. Because airline staff need to make announcements, keep one booklet in each meal tray, clear trash etc. My guess is airlines either charge a fixed fee or a commission on each sales. So that is extra expense flyers need to pay (indirectly)

3. Cost of actual products that need to be paid to manufacturer and logistics cost (to ship them to airport counters)

4. Back office cost- to print booklets and distribute them, run call centres and other administrative expenses.

Since these in-flight shopping/free gift business is running since several years, I am assuming good number of passengers end up buying these things once in a while, enough for company to recover its cost and may be make a small profit.

Let us compare some prices of Ava Skymart's free gifts!
A U-Globe 10000 mAh is shown to be worth Rs 4550 in Ava SkyMart free gift cataglogue for which you need to pay Rs 999 as handling charges. While exact model number offered by Ava Skymart is not known, U-Globe 10000 mAh power banks are available for Rs 1161 onwards on flipkart- Rs 162 more, with free home delivery, refund/replacement service and other benefits. I am sure what Ava Skymart is giving would be a much cheaper, old model which is not worth Rs 999 we have to pay as "handling charges"

Looks like this U-Globe brand is existing solely to aid fooling of customers, as MRP of Rs 4550 for a 10k mAh is not justified under any standards

The irony is Ava itself is contracting their pricing. If you wish to buy, they have on offer a 15000 mAh Flasharge powerbank, which is said to have an MRP of 3750 but being sold at 1990. No one has heard of this Flasharge brand. Popular Intex 16000 mAh powerbank is available for Rs 1349 on flipkart instead. So you decide the worth of these in flight sales gimmicks.


It is cheaper for Ava Skymart to let me win a Rs 3750, 15000 mAh powerbank for Rs 999 instead of giving me Rs 4550 worth power bank, but try explaining this to their staff!

But then, India has large population, majority of which doesn't have the time, patience or the idea of doing some research before their purchase and gets tricked buy what's advertised to them. Many companies survive on these ignorant customers.

In flight shopping might be worth if you are looking for collectibles like airline t shirts, mini planes, airport set, or such items which are not available for purchase once on ground. Commercially speaking, there is no way one can sell things cheaper in air than on ground.

What are your thoughts? Do you think in-flight shopping is indeed cheaper? in flight shopping is another source of revenue for airlines, to extract some more cash from captive audience who are bored in flight, busy and stressed for time once on ground, commercially well off and have limited options on board to cross check anything and even limited options to complain after leaving the plane, if they realize that the transaction was not worth it.

One tip to avoid impulsive shopping would be to pocket this booklet, check the prices offline at your convenience and if you still find value, purchase it during your return flight.

Similar: TigerAir experience * Scoot Budget airline begins India operations * Comparing 7 European airlines * AirAsia major delay experience * Flight Simulator experience * 10 bad habits every air traveler should avoid from next flight *  Mustafa centre vs Changi airport which is cheaper? * 

8 comments :

magiceye said...

You will soon be in demand by all these guys not to blog about them lol!!
Great job!! Power to you!!

Shrinidhi Hande said...

hahaha, let us see

A p Singh said...

thats very true

Shrinidhi Hande said...

Thanks AP Singh ji

satish said...

The quality of stuff sold leaves much to be desired.

Shrinidhi Hande said...

True

Nisha said...

I have never fallen prey t that tactic. Fortunately. :)

But I think you are creating a market for yourself by blogging about all these controversial (not for us, but them) stuff. :)

Shrinidhi Hande said...

@nisha- hmm, I am only putting forward my observations. If it saves a few hard earned rupee for a few people, I will be happy.