SOUTH KOREA: THE SHILLA DUTY FREE
cosmetics, liquor, tobacco, souvenirs, eyewear and other products.” Meanwhile, online sales form an important and growing part of Shilla’s domestic downtown business. The Shilla Duty Free online
shopping service has attracted many more users during the past year with the introduction of several new services. This follows the launch of
the operator’s original ‘Shilla Tipping’ online blogging service in September 2018. Shilla Tipping has proved to be very
popular with South Korean, Chinese and other foreign customers. Accessed through The Shilla
Duty Free mobile phone app, Shilla Tipping is a consumer product review service that allows users to exchange product news and opinions with other Shilla customers. Shilla Tipping blog users receive
up to 3% commission on purchases of duty free goods made by other Tipping users through their blog postings. “Shilla online duty free introduced
various industry-leading new services such as Shilla Game, Shilla Pay, Shilla TV and Shilla Trip last year to target mobile-savvy customers,” comments Kim. Launched in March 2019, Shilla
Game is a platform that allows users to play online games and earn ‘La La Cash’, which can be used like
Work to extend The Shilla Duty Free Jeju downtown store completed in 2019.
money when making purchases. Shilla TV carries product reviews
and other information linking users to The Shilla Duty Free online pre- order service. Shilla Trip, the latest addition, is
a travel-related open market platform selling flight tickets, accommodation,
destination
activities and travel packages. Users receive credit rewards
for purchases which can be used when purchasing online duty free products. Kim concludes: “Although 2020
seems to be full of uncertainties due to various factors such as the Covid-19 crisis and the Hong Kong protests issue, The
“Shilla online duty free introduced various industry- leading new services such as Shilla Game, Shilla Pay, Shilla TV and Shilla Trip last year to target mobile-savvy customers.”
Taeho Kim, Executive Vice President - Korea Division, The Shilla Duty Free
Shilla Duty Free will never stop innovating and trying our best to increase our business stability and competitiveness.” «
Anti-climax at Incheon as Shilla pulls preferred bid at T1
Incheon International Airport Corporation (IIAC) had awarded Shilla the Liquor, Tobacco and Food (DF3) licence in the Terminal 1 duty free tender. However, shortly before TRBusiness
went to press, Shilla – and rival Lotte Duty Free – withdrew their respective bids to runs shops at the terminal due to the Covid-19 crisis. Shilla, which currently runs the DF4
liquor and tobacco concession [Lotte Duty Free had been named preferred bidder for this concession – Ed], submitted bids for both the DF3 and DF4 licences. IIAC launched a tender for eight airside
Terminal 1 concessions, which expire on 31 August and also include Shilla’s DF2 perfume and cosmetics and DF6 fashion/
MAY 2020
accessories licences, in January. Shilla Duty Free’s coveted DF2 perfume
and cosmetics licence did not attract any first round bids as Shilla and other operators refrained from bidding due to IIAC’s high stipulated MAG fee.
Similarly, Shilla did not bid for its DF6 fashion/accessory licence as it attracted only one bid (Hyundai Department Store Duty Free). Legally, this should be re-bid, alongside the DF2 licence, although that now remains to be seen given the current situation. “[The] duty free business in 2020 will
be uncertain due to a variety of factors such as Covid-19 and the deteriorating business environment,” says Taeho Kim, Executive Vice President - Korea Division, The Shilla Duty Free. “In addition, competition between
Shilla has withdrawn its bid for the Incheon Airport Terminal 1 concessions. Pictured is Shilla's duty free store at Terminal 2.
Korean duty free operators has intensified. Customer characteristics keep changing and diversifying which make finding and answering the customers’ needs more tricky.”
TRBUSINESS 67
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