Generating non-aeronautical revenue through e-commerce : a comparative study of Hong Kong International Airport and London Heathrow Airport

Abstract

With the increasing competition between airports and evolvement of air travel business, airport no longer solely serves as transportation gateway nowadays, but also an infrastructure with multi-purpose usage. Apart from aeronautical business, airports also make increasing investment in non-aeronautical business in order to generate new source of revenue, with retail and food & beverage (F&B) being two of the most important aspects. Retail business development is especially an advantage to hub airports as they have large passenger traffic and more space for retail shops. Nowadays, many airports also look into online business and develop their own e-commerce platforms. This study aims at analysing the e-commerce business development of airports in both qualitative and quantitative approaches. Hong Kong International Airport (HKIA) and London Heathrow Airport (LHR) had been chosen for a comparative study because of their scale and international hub status. Literature review, case studies, survey and interview were conducted in order to understand the characteristics of airport shoppers, their perceptions of online shopping, insights in airport e-commerce development and what HKIA and LHR could learn from other airports. The e-commerce platforms of HKIA (HKairport Shop) and LHR (Heathrow Boutique) have different mechanisms. HKairport Shop adopts a one-stop-shop concept which passengers could pay online and collect all the goods at one point, while Heathrow Boutique operates as a reservation system which passengers have to collect and pay for the goods at individual shops. Other findings showed that airport shoppers’ behaviour is influenced by various factors, such as the ‘captive’ airport environment, stress and limitation of time. Pre-planned shoppers are more in favour of online shopping than impulse-buying shoppers. From survey results, it was found that passengers were not aware of the existence of airport e-commerce platforms in general. Age was found to be a determining factor of online shopping behaviour, with younger passengers more engaged in online shopping and more likely to use in-airport delivery service at a cost. The interview with an airport professional recognised the potential in collaboration between airports and airlines in developing online retail business. Lastly, HKIA and LHR were suggested to refer to the new online retail initiatives of other airports to tailor-made and enhance the e-commerce platforms which best fit their markets.