SOUTH KOREA: GRAND DUTY FREE
Grand Duty Free set for airport and inflight expansion in 2019
The duty free arm of Grand Tourism Hotels Co Ltd, tells David Hayes that it is forecasting total sales of about KRW 100bn (US$88.5m) this year after taking over Incheon International Airport’s Terminal 1 perfume and cosmetics single SME shop concession.
G
rand Duty Free took over Incheon Airport’s DF11 beauty shop concession on
7 October last year from Samick Duty Free, after winning a two-part tender conducted by Incheon International Airport Corporation (IIAC) and Korea Customs Service (KCS). This followed a decision by Speco
(Samick Duty Free’s parent company) to terminate its duty free license and concentrate on its unrelated core business activities. Grand DF hired Samick’s 20-strong
Incheon Airport staff team to continue running the shop and has made several changes to the store’s beauty brand selection. “SK-II decided to pull out, and
MAC is coming in with Innisfree, LG Belif and two more Korean cosmetics brands,” Kong You Seon, Duty Free Business Division Executive Director at The Grand Duty Free, tells TRBusiness. Grand’s 234sq m perfume and
cosmetics store occupies a prime retail location in the centre of Incheon Airport’s T1 main terminal area, facing the airport’s landmark Louis Vuitton boutique. The store’s prime location has generated interest among a number of large beauty brands. “One leading international brand
Grand Duty Free’s P&C store at Incheon Airport groups local and international brands together.
requested a big space; about 60-70sq m, but our store only measures 234sq m in total with 44 beauty brands; so how can we find [that sort of] space?” asks Kong.
GDF signs with Air Astana Grand Duty Free already operates airport and downtown stores in Daegu City and is currently expanding in inflight retail too. The company tells TRBusiness that
it is
taking on a second airline partner, this time a foreign national carrier. This is in addition to South Korean airline, Jeju Air whose inflight retail brochure boasts 240 items, available on flights to Beijing, Shanghai, Guam, Hong Kong, Macau and various cities in Japan and Indonesia. According to Kong, cabin sales on
Jeju Air are expected to reach KRW 20bn ($18m) in 2019. On top of this, GDF has signed
Kong You Seon, Duty Free Business Division Executive Director at The Grand Duty Free.
MAY 2019
a contract with Air Astana of Kazakhstan to establish a joint venture to manage the carrier’s inflight duty free business. “We will begin operating the Air
Astana inflight service in the second half of 2019,” says Kong. “The main
Grand Duty Free is highly likely to be among the contenders bidding for Daegu International Airport’s duty free arrival shop, for a which a tender is expected in 2020.
TRBusiness
items will be perfume, cosmetics and liquor. Air Astana’s flights are mainly to CIS countries, the Middle East and Asia, so the inflight sales are totally different to South Korea.” Whilst the inflight business
holds exciting potential for GDF, it is also looking to expand its duty free operations on the ground in its home market. The company is one of a number
of SME enterprises interested in operating arrivals shops that are expected to open in around five regional airports owned by Korea Airports Corporation (KAC) in the next 12-18 months (if KAC gains approval from the government). GDF is highly likely to be among the contenders bidding for Daegu Airport’s arrivals shop, for a which a tender may take place in 2020. «
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