SOUTH KOREA: KOREA AIRPORTS CORPORATION KAC seeks approval for arrivals shop tenders


Korea Airports Corporation tells David Hayes that it is seeking approval to tender the first duty free arrivals shop at Gimpo Airport and hopes that tenders at its other airports will follow.


K


orea Airports Corporation (KAC) is hoping to receive approval from the


government to issue a tender for a single duty free arrivals shop at Seoul Gimpo International Airport, later this year. KAC would ideally like to conduct


the process before the end of this year, however it is still in negotiations with several parties. Gimpo is just one of numerous


arrivals duty free shops which KAC hopes to open in regional airports across South Korea from 2020 onwards. KAC is responsible for awarding the concessions. In line with government policy


on airport duty free arrival shops, bidding for Gimpo’s mixed category arrivals shop license would be restricted to SME companies. Should the tender be approved,


KAC expects it to generate strong interest among SME operators and other enterprises keen to enter the duty free industry. Seeking approval for the


Gimpo shop tender recently accelerated following signs the government might decide to roll- out arrivals shops faster than first planned. This was prompted by the introduction of airport arrivals shopping in Japan over the past 18 months. “The government suggested


that it might be possible for KAC to launch arrivals duty free shopping six months after


Incheon


International Airport began operating its arrivals shops,” Kim Su Min, Korea Airports Corporation’s Commercial Facilities Team Assistant Manager, tells TRBusiness. “Recently the government


changed its mind and said that Gimpo Airport might be able to open an arrivals shop earlier.” She added: “Hopefully we could


have an arrivals shop in Gimpo as early as the end of this year. “KAC is preparing to make a plan how to issue a tender for arrivals shops,


MAY 2019


but we don’t have any specific bidding timeline.” The bidding process is expected


to follow a similar procedure as the one used for Incheon International Airport’s two recently awarded duty free arrival shop concessions. Operators would submit their bids


to KAC which would then shortlist two companies. The pre-qualified bids would


then be assessed by Korea Customs Service (KCS), which would make the final decision — as it did with the Incheon Airport shops in March. “Gimpo Airport’s arrivals shop


would sell all items except for tobacco and fresh food,” Kim clarifies. “We think liquor will be popular; also perfume and cosmetics.”


Intl. pax grows 6.4% in 2018 Although the total number of passengers served by Gimpo Airport rose just 2% in 2018 to 24.6m, international pax grew by a more encouraging 6.4% to 4.3m. South Korean travellers accounted


for 45% of all international passengers using Gimpo Airport in 2018, while Chinese visitors represented 30%.


Japanese


travellers made up the difference of 20%.


Overall, international passengers


spent about $90m in Gimpo Airport’s departure duty free shops in 2018, according to Kim. Perfumes and cosmetics


accounted for around 45% of sales. Tobacco comprised 15%; foodstuffs 8%; ginseng products 6%; leather bags 5% and liquor just 5%. Lotte Duty Free which operates


Gimpo Airport’s perfume, cosmetics and general merchandise concession registered sales of $59m in 2018; around 76% of the airport’s total duty free revenue last year. From January to mid-October


2018, Gimpo’s other concession- holder, Cityplus Duty Free, registered $30m in sales of liquor, tobacco and fashion items before returning its duty free license to KAC citing ‘financial difficulties’. Korea’s second-largest duty


“Hopefully we could have an arrivals shop in Gimpo as early as the end of this year. KAC is preparing to make a plan how to issue a tender for arrivals shops, but we don’t have any specific bidding timeline.”


Kim Su Min, Assistant Manager, Commercial Facilities Team, Korea Airports Corporation


TRBUSINESS 99


Above: City Duty Free has faced tough trading conditions at its original Gimpo Airport shop.


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