LEADING ASIA PACIFIC OPERATORS: SHILLA DUTY FREE
them access new overseas markets through our global stores,” the spokesperson remarks. With Seoul Incheon Airport
becoming the world’s fifth largest airport by passenger numbers based on 2018 data (Source: Airports Council International), following the opening of Terminal 2 on 18 January 2018, “our Incheon Airport stores are set to become even more important in the future,” says the spokesperon. At Jeju International Airport, Shilla
anticipates a strong performance with the expected increased in tourist numbers. Shilla runs a 409sq m perfumes
and cosmetics and liquor and tobacco store at the location, featuring around 70 brands across both categories. “We are also trying to maximise
synergies by conducting integrated marketing with our Jeju downtown store,” the spokesperson explains. Alongside these key openings,
increased numbers of Korean outbound travellers not only helped Shilla’s growth last year, but provided a boost for the entire Korean duty free market. As of September 2018, the number
of Korean outbound travellers had reached 16.8m (Source: Trib Global).
Additionally, The Shilla Duty Free is providing a window of opportunity for Korean brands and helping them access new overseas markets through our global stores.”
Spokesperson, Shilla Duty Free
Shilla enjoyed an eventful 2018 at home and abroad.
With this figure expected to grow +7% year-on-year through to 2027, prospects are certainly bright for Shilla and Korean DF&TR. At the time of writing, Shilla had
yet to publish figures on its year-to- date performance in 2019. But with Korean duty free
sales rising +20% from January to February compared to the same period last year (Source: Korea Duty Free Association) there is every chance results will be favourable. It seems there is plenty for Shilla to
look forward to across the board in 2019. The extension of its downtown Jeju Island shop is one of several projects and is part of its plan to boost the company’s domestic and airport duty free revenue by double- digit figures. The spokesperson says: “The Shilla
Duty Free’s Jeju downtown store renovation started last year with the grand opening set to take place in the first half of 2019. “The total sales area will expand
by 10% and provide a better shopping environment. “Customers will also have the
chance to discover promising small and medium-sized brands.” Staying in Korea, Shilla emphasises
the importance of its Gimpo Airport operations, where it began trading on 9 January 2019. This follows the capture of the five-year liquor and tobacco duty free contract in 2018. “The start of operations at Gimpo
Airport completed the ‘duty free belt’, connecting Korea’s three major gateways airports (Seoul Incheon, Jeju International and Gimpo Airport). “In addition, Shilla is the airport’s
solitary liquor and tobacco operator. This category is very significant as there are many business travellers at Gimpo.”
Incheon T1 rent reduction While Shilla was busy opening stores at Seoul Incheon Terminal 2 and Jeju International Airport in the early part of last year it was also locked in discussions with Incheon International Corporation (IIAC) over a possible rent reduction at Incheon Terminal 1. This was to mitigate a fall in
passenger spend per head and overall pax volumes in the wake of the THAAD missile crisis. The situation was finally resolved
last April when Shilla accepted a 27.9% rent reduction offer in Terminal 1. Its decision was influenced by ‘positive political movements’ geared towards increasing Chinese inbound tourism in South Korea. At the time, Shilla was also
encouraged by developments which looked set to result in China lifting economic restrictions on South Korea. The spokesperson recalls: “The
Shilla is confident of increased sales at Jeju International Airport as tourist numbers increase. 42 TRBUSINESS
Terminal 1 rent reduction was based on the ratio of international airlines (KLM, Korean Air, Air France and Delta
MAY 2019
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