NEWS/ANALYSIS: INCHEON AIRPORT Entas makes bold arrivals sales forecast A

fter being shortlisted by Incheon

International Airport Corporation (IIAC)

in mid-March, SM Duty Free and Entas Duty Free were officially announced by the KCS as the victors for the duty free arrivals shop tender. SM Duty Free will open two

shops covering 380sq m combined at the eastern and western zones of Terminal 1, while Entas Duty Free will occupy a 326sq m single unit at Terminal 2 at the centre of the port of entry. Both concessions, which will run

for five years, officially begin on 31 May following a preparation period of two months. The KCS says it will ‘actively

support’ the companies in anticipation of the openings. As reported, the tender was

open to small and medium-sized enterprises only. In early March, TRBusiness revealed

a total of 14 bids were lodged for the two concessions following a decision last year to permit arrivals duty free shops at the port of entry. City Duty Free, Daewoo

Development, Grand Duty Free, Kunsan Seaport and Dufry Thomas Julie Korea were other likely contenders, although TRBusiness is seeking confirmation on the pre- shortlist bidders.

AF2 estimate ‘too low’ It is understood that IIAC expects first year sales from the new concessions to reach at least KRW100bn ($80m). The new shops will offer all product

categories except for tobacco and fresh food products under a $600 allowance ceiling. This is designed to reduce the ‘discomfort’

At the end of March, the Korea Customs Service (KCS) approved shortlisted candidates SM Duty Free and Entas Duty Free to operate Incheon International Airport’s very first duty free arrivals shops at Terminal 1 (AF1) and Terminal 2 (AF2). Luke Barras-Hill and Andrew Pentol report.

experienced by tourists travelling with duty free goods, while boosting domestic consumption. Citing a survey conducted by

the Korea Development Institute, KCS says 81.2% of people favoured arrivals duty free stores at Incheon International Airport. It adds that foreign tourist

numbers in Korea have jumped by 7.1% annually in the past 10 years. Entas Duty Free is expecting to

surpass IIAC’s year one revenue projection following the opening of its arrivals duty free store in Terminal 2. David Yu, CEO, Entas Duty Free told

TRBusiness: “Incheon International Airport Corporation believes the AF2 arrivals concession will generate revenue of approximately KRW35bn ($30.8m) in the first year, but we believe their prediction is too low. “This is because Terminal 2 is

dominated by Korean Air, which generates more than 85% of total passengers. We expect year-one revenue to reach KRW40bn.” On winning the tender itself, Yu

Entas Duty Free’s downtown store in Incheon.

APRIL 2019

remarked: “We are extremely happy with the decision and will work hard with our key vendors to open the

store by 31 May. “The main customers will be

Koreans and we have prepared our merchandise based on this projection.” He added: “These are the first

arrival duty free stores in Korea and we expect the AF1 and AF2 stores to perform well.” An IIAC source told TRBusiness it

is confident both operators will hit the ground running once operations begin. “Both retailers are running successful departure duty free businesses, so we expect them to be successful in arrivals.” The source also indicated it is

expecting the stores to open on time. “We are planning to open the

arrivals stores on 31 May, but this could change depending on construction and other schedules.” «

“IIAC believes the AF2 arrivals concession will generate approximately KRW35bn in the first year... but we believe their prediction is too low.”

David Yu, CEO, Entas Duty Free TRBUSINESS 19

Above: Incheon International Airport T1.

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