Over the past year, the number of passengers using Incheon International Airport exceeded 70 million for the first time since its opening in 2001, setting a new annual passenger record once again. According to Incheon International Airport Corporation, the total number of passengers using Incheon Airport in 2019 was approximately 71.17 million, an increase of about 4.3% compared to the previous year. The photo shows the duty-free area at Incheon Airport on the 9th. / Yeongjongdo = Photo by Kim Hyunmin kimhyun81@
[Asia Economy Reporter Seungjin Lee] The bidding for the duty-free shop business rights at Incheon International Airport Terminal 1 (T1), which generates annual sales of up to 1 trillion KRW, has closed. The bidding saw fierce competition as all of the industry's "Big 4"?Lotte, Shilla, Shinsegae, and Hyundai?participated.
According to the duty-free industry on the 26th, the preliminary bidding for the Incheon Airport T1 duty-free shop business rights, which closed at 4 p.m. that day, included all of the "Big 4"?Hotel Lotte, Hotel Shilla, Shinsegae DF, and Hyundai Department Store Duty Free, the latter emerging as a latecomer and a variable factor.
The bidding targets consist of a total of eight business rights: five for large corporations and three for small and medium-sized enterprises, encompassing 50 stores. Last year, the five large corporation business zones recorded annual sales reaching 1 trillion KRW.
Among the bidding zones, DF2, which sells cosmetics and perfumes, DF4, which sells liquor and tobacco, and DF6, which sells fashion and accessories, are currently operated by Shilla Duty Free. DF3, which sells liquor, tobacco, and packaged foods, is operated by Lotte Duty Free, and DF7, which handles fashion and accessories, is operated by Shinsegae Duty Free.
Among the small and medium-sized enterprise zones, DF9 is operated by SM Duty Free, DF10 by City Plus, and DF12 by Entas Duty Free.
The participation of Lotte, Shilla, and Shinsegae in this bidding was anticipated early on. This is because Lotte Duty Free (DF3), Shilla Duty Free (DF2, 4, 6), and Shinsegae Duty Free (DF7) are all current operators of stores in the bidding zones.
The variable in this bidding is Hyundai Department Store Duty Free, which is challenging airport duty-free shops for the first time. Hyundai Department Store Duty Free entered the duty-free business by opening the Trade Center store in 2018. Since Hyundai Department Store Duty Free lacks experience operating airport duty-free shops, the industry expects it to show enthusiasm by bidding high rental fees.
A Hyundai Department Store Duty Free representative stated, "We completed the preliminary registration for participation in the Incheon Airport duty-free shop bidding today and plan to participate in the bidding tomorrow."
Incheon International Airport Corporation will conduct presentations by each company next month and evaluate product and brand composition, service and marketing, store layout and design, and bid prices by business right. They will negotiate and sign contracts with the highest-scoring preferred bidders. Afterward, once the contractor receives patent review approval from the Korea Customs Service, they will be confirmed as the final operator.
The confirmed operators can run the duty-free shops for five years and, if they meet evaluation criteria, can extend the operation for an additional five years, allowing a maximum of 10 years of operation.
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