SOUTH KOREA REPORT: INCHEON AIRPORT
passenger numbers using the airport rose strongly, rebounding from reduced arrivals in 2015 when the mid-year MERS crisis caused many foreign tourists to cancel travel plans to South Korea. “We are happy about our 2016
sales,” added Kim. “We hit 57m passengers and had a 17% increase in passenger numbers. Duty free sales hit US$2bn again; there was a 14% increase in KRW sales and 12% in US dollars. “In 2015 we had the MERS
outbreak, that’s why everything grew in 2016. Last year business recovered, plus we had growth.” Prior to diplomatic relations
between South Korea and China becoming strained over the THAAD missile system deployment issue, IIAC expected passenger numbers to increase by almost 10% in 2017 and duty free revenue to rise by at least 5%.
Forecasts in doubt? But for the moment all forecasts are in doubt due to uncertainty over passenger numbers, as South Korea awaits the forthcoming presidential elections and the appointment of a new government charged with the immediate task of resolving the current THAAD missile dispute with China, among other pressing issues. Returning to the airport’s
sales performance in 2016, Kim revealed that perfume & cosmetics accounted for 39% of total duty free sales at Incheon Airport, while luxury boutiques and leather goods combined represented a 29% share of revenue.
Tobacco accounted for a further 12% share of sales and liquor, 9%. “International brands represent
70% of perfume and cosmetics sales and South Korean cosmetics, 30%,” Kim said. “The perfume & cosmetics share
of sales is stable, but tobacco is rising as local taxes increased two years ago and now cigarettes are almost double their old price.”
Pax growth outpaces sales According to IIAC figures, last year’s increase in departing international passengers at Incheon was slightly above the recorded rise in duty free spending. “Right now US$70 per passenger
Heinemann hits $4bn in group turnover in 2016
Fighting talk from TFWA President
is the average duty free spend; it’s getting lower but it’s still good,” Kim commented. Outbound South Korean
China committed to domestic tourism drive
passengers accounted for 60% of total departing passengers at Incheon Airport last year while Chinese travellers represented 25% of departing passengers. “We expect the nationality
Also inside
proportions to be almost the same this year,” Kim added. “However, last year LCC passengers
grew 25% more than passengers for regular airlines; LCC passenger numbers are growing more than for scheduled airlines.” LCC airlines carry 20% of total
This content is for subscribers only. To receive a full digital copy of the May issue,
departing passengers from Incheon Airport with most LCC passengers classed as ‘young people’ and members of group tours. “LCC passengers are very price
sensitive and find it easy to access the Internet,” Kim remarked.
SME operators exceed expectations
www.trbusiness.com/subscriptions
One development among Incheon’s duty free operators that was not previously anticipated is that the airport’s new SME operators are performing better than expected and generally obtaining higher revenue from their outlets than the previous concession holders; including South Korea’s leading duty free operators. “SME shops are doing well,” said Kim.
Incheon Airport’s new SME operators, such as Entas Duty Free, are performing better than expected, says Kim.
MAY 2017
“Their sales are above expectations compared to their bid forecasts. “As their sales grow, more brands are
“SME shops are doing well. Their sales are above expectations compared to their bid forecasts. As their sales grow, more brands are being invited to the SME shops.”
Kim Bum Ho, Incheon International Airport Corporation (IIAC)
May 2017 20
YEARS 1997-2017
“LCC passengers mostly use online duty free shopping services, but they do buy in airport shops what they cannot buy online. “They shop in our boutiques
TRBusiness Annual South Korea Report
and buy tobacco and liquor; also, perfume and cosmetics products which are not listed online.” To cater to these more price-
Top Asia Pacific operators drive global growth
sensitive customers, duty free operators at Incheon Airport are continually developing special shopping promotions. However, Kim noted that LCC
Exclusive: Coty details $12.5bn P&G acquisition
Hong Seok Ho Shinsegae shoots for $1bn sales target in 2017... p115
passenger sales remain relatively small at present. “Long-term we want our own
LAGARDÈRE IN ROME | ACI CONFERENCES’ REVIEW | LOTTE DUTY FREE | DFS GROUP SHILLA | SUNRISE | EVER RICH | CHANGI AIRPORT | SINGAPORE CRUISE CENTRE | CHINA DUTY FREE | INCHEON AIRPORT | HDC SHILLA | HANWHA GALLERIA | SM DUTY FREE WILLIAM GRANT & SONS | PERNOD RICARD | BROWN-FORMAN | BEAM SUNTORY | BACARDI BEAUTY IN ASIA REPORT | COTY’S PHILIPPE MARGUERITTE | PEOPLE NEWS | NOW & THEN
IIAC online shopping service, but for now this is not allowed by KCS,” Kim revealed. «
Last year’s increase in departing international passenger numbers at Incheon Airport was slightly above the recorded rise in duty free spending.
plus 12 monthly print editions and the critically acclaimed TRBusiness Top 10 International Operators Report, please visit
being invited to the SME shops.” All operators keep merchandise
sales under continual review, adjusting brands and products to meet changing market conditions. “Some operators have changed
chocolate confectionery for ginseng products,” Kim noted. “South Korean cosmetics brands are popular and their face mask products are popular. “Some cosmetics shops at Incheon
Airport now have a face mask zone. They are cheap and they sell well.”
TRBUSINESS 97
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148 |
Page 149 |
Page 150 |
Page 151 |
Page 152 |
Page 153 |
Page 154 |
Page 155 |
Page 156 |
Page 157 |
Page 158 |
Page 159 |
Page 160 |
Page 161 |
Page 162 |
Page 163 |
Page 164 |
Page 165 |
Page 166 |
Page 167 |
Page 168 |
Page 169 |
Page 170 |
Page 171 |
Page 172 |
Page 173 |
Page 174 |
Page 175 |
Page 176 |
Page 177 |
Page 178 |
Page 179 |
Page 180 |
Page 181 |
Page 182 |
Page 183 |
Page 184 |
Page 185 |
Page 186
