SOUTH KOREA REPORT: INCHEON AIRPORT
each of the three licenses cover all merchandise categories. DF4 consists of two shops totalling
825sq m in area, while DF5 is for a single 741sq m shop; DF5 comprises two shops totalling 241sq m of floor space. After initially inviting bids with a
closing date of 30 March, IIAC agreed [following discussions with the Ministry of Strategy, Finance and Transport] to modify its original tender evaluation process and extended the bid closing date to 5 April. The extension was made to comply
with South Korean government regulations requiring bidders to be given five extra days to prepare bids in cases where rules are changed during the tendering process.
Revised bid evaluation IIAC was originally responsible for the entire T2 duty free tendering process, Kim explained. However, following discussions with the Strategy, Finance and Transport Ministry, the bid evaluation process was revised. Now the IIAC and Korea Customs Service (KCS) are each responsible for 50% of the bid evaluation weighting. As previously reported by
TRBusiness, under the revised bid process IIAC will evaluate bidders’ business and financial proposals, while KCS will evaluate the social contribution element of bidders’ proposals. IIAC will give a 60% weighting
to bidders’ business proposals based on various criteria including shop design, bidder’s experience, investment plans, sales management and promotion plans. The remaining 40% weighting
we will select two bidders for each concession to send to KCS to evaluate, using their 50% share of the total evaluation decision weighting.” The revised bid evaluation process
involving both IIAC and KCS is considered highly unusual by duty free operators who have had to comply with official requirements in order to bid.
Is five years too short? Unsurprisingly, the conglomerate and SME operators bidding for the T2 licenses have all commented that the current government stipulated five- year concession period, for which the T2 licenses will be issued, is too short given the level of investment needed to install shops and boutiques to the high standards required. Repeating comments made when
Heinemann hits $4bn in group turnover in 2016
Fighting talk from TFWA President
China committed to domestic tourism drive
Incheon Airport’s current T1 duty free concessions were tendered two years ago, operators generally are in favour of a change in government regulations to introduce 10-year licenses (five years initially extendable for a further five years) to enable shop installation costs to be written off over a longer period. Kim insists that passengers using
Also inside
“Right now US$70 per passenger is the average duty free spend; it’s getting lower but it’s still good.”
Kim Bum Ho, Incheon International Airport Corporation (IIAC)
May 2017 20
YEARS 1997-2017
will have Air Star Avenue in T2 using our own Air Star brand.” IIAC has adopted a ‘Green Eco- smart’ design concept for T2 that incorporates an ‘open spacious ambience ‘in contrast to T1 which has lower ceilings. “T2 is higher than T1; there is a high
TRBusiness Annual South Korea Report
Top Asia Pacific operators drive global growth
Hong Seok Ho
T2 will have a ‘completely different experience’ to those using T1. “T1 has dispersed shopping, there
This content is for subscribers only. To receive a full digital copy of the May issue,
are four entrances into the airside area,” Kim explained. “T2 has two entrances to the airside area, so the shopping environment will be better. “About 80% of the T2 duty free shop space is in the central area. We
the most exclusive brands in the South Korean duty free market both have suitable retail facilities in T2, Kim explained that prior to inviting bids, IIAC started preliminary negotiations with Louis Vuitton and Chanel over their preferable boutique locations. Luxury boutiques are included
in concession DF3 along with fashion goods, toys, electronics and miscellaneous products.
will be given to bidders’ financial proposals which will include the minimum payment guarantee and other license fee components. KCS’s evaluation criteria, on the
other hand, will include bidders’ cooperation efforts with SME companies including merchandise suppliers; also, support for tourism development provided through bidders’ infrastructure investment proposals. “In the past we selected high
score bidders for our T1 duty free concessions,” Kim said. “For T2
MAY 2017
plus 12 monthly print editions and the critically acclaimed TRBusiness Top 10 International Operators Report, please visit
www.trbusiness.com/subscriptions
roof in the atrium and more sunlight. In the evening we will use bright lighting,” Kim said. “There is a wide concourse and better shop visibility as the architectural support columns are hidden.” IIAC’s retail plans for T2 include
Exclusive: Coty details $12.5bn P&G acquisition
Shinsegae shoots for $1bn sales target in 2017... p115
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
providing passengers with a full collection of top line luxury brands to complement the extensive range of luxury boutiques in T1. In an effort to ensure that two of
Duty free sales rose to $2bn in 2016 at Incheon International Airport. TRBUSINESS 93
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
