NEWS ROUND-UP KAC to launch nationwide duty free review
State-run Korea Airports Corporation (KAC) is preparing to launch its first nationwide review of its airport duty free concession contracts and merchandise offer following two license awards last year. This is part of its long-term efforts
to boost revenue from travel retail concession fees and other commercial activities, including restaurants and airport car park services. “This year we are looking at our new
concession fee system,” reveals Kim Su Min, Korea Airports Corporation’s Commercial Facilities Team Assistant Manager, in an exclusive interview with TRBusiness. “Sales are important to us and to
the airport concession operators. We are bringing in a South Korean consultancy, Samil PWC, to review all our commercial contracts. “Another company, Urban Property, is
reviewing duty free merchandise in every one of our airport terminals. “We have a fixed annual rental fee and
calculate the payment depending on the operator’s total annual sales. “The fixed rental is the MAG payment. If they exceed the agreed amount then they
Jeju International is one of KAC’s best-performing airports for duty free sales.
pay the higher concession fee rate. “Last year DufryThomasJulie at Busan
Gimhae Airport and Kookmin at Muan Airport paid extra as they had good sales.” KAC’s review of airport commercial
operations will include an in-depth survey of passenger attitudes as part of wider efforts to modernise and upgrade each airport’s public interface. “Our strategy also includes the
renovation of our websites – at the moment they only show the airport’s location information and contact telephone numbers,” Kim said.
“We are thinking about providing more duty free shopping information including details about different brands and sales promotions. ‘This year we are doing a focus group
survey to better understand our duty free customers. “Usually we just have regular passenger
questionnaires, so it is the first time for us to do focus groups on all our international airports.” The full-length feature on KAC appears
on p121 within the TRBusiness Annual South Korea Report.
Shinsegae starts construction on new store and targets $1bn
Shinsegae Duty Free says it is currently targeting sales at its new Gangnam downtown store to reach 70% of its existing Myeongdong duty free shop’s annual revenue, for which it has set a US$1bn sales goal in 2017; the first full year the shop has been trading. By contrast Shinsegae Duty Free’s Busan
Centum downtown shop’s target has been set at $300m for 2017, which is also the first full year the shop has traded. Shinsegae Duty Free tells TRBusiness that
it has started construction work on the company’s second Seoul downtown duty free store in Gangnam and expects it to be complete by the end of this year.
“We want customers to feel cosy and luxurious in our Gangnam downtown store,” Hong Seok Ho, Shinsegae Duty Free Merchandising Division Senior Vice President told TRBusiness. “We don’t want an entire floor to
be perfume & cosmetics, fashion, watches or another category. We want to mix categories.” The successful launch of Shinsegae Duty
Free’s Myeongdong shop has created high hopes of repeat success with the new Gangnam shop. “We don’t want our new store to be
like a group tour destination where it’s important to locate goods for fast pick
and go shopping; and to have the same category goods in the same area. “Instead we want to provide leisurely
shopping so that customers enjoy our store and the shopping experience.” Read the full interview with Hong Seok
Ho on p115 within the TRBusiness Annual South Korea Report.
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