TOP 10 OPERATORS 8: KING POWER INTERNATIONAL


8 O


Clean sweep for King Power after Bangkok and regional airport tender triumphs


The back-end of last year was anything but easy for King Power International Group, which lost its much-loved Founder, Owner and Chairman, Vichai Srivaddhanaprabha in a fatal helicopter crash. This year has also been challenging, but for different reasons, as Andrew Pentol discovers.


n 19 June 2019, Airports of Thailand (AoT) approved the results of three


tenders won by King Power International Group. One for the duty free concession


at Bangkok Suvarnabhumi International Airport (BKK) and another was for commercial concessions (including food and beverage and foreign exchange), also at BKK. The final tender was for a duty


free concession covering Phuket, Chiang Mai and Hat Yai International Airports. According to reliable sources and


this publication’s own analysis of the company’s performance, TRBusiness estimates King Power International generated sales of $2.7bn in 2018. The previous year, retail sales


were up +17.7% across the operator’s airport and downtown businesses, driven by increased arrivals to Thailand. Approval of all three contracts


marked the end of a testing time for the retailer, which was forced to look on as the single contract AoT was proposing, covering all four airports was subjected to intense scrutiny by various trade organisations and other industry observers.


OCTOBER 2019 Organisations such as the Thai


Retailers Association (TRA) and Thai Duty Free Shop Trade Association, believed the master concession model covering the four airports was monopolistic. In short, they were strongly against the single contract model. The TRA, for example, actually


favoured a concession by category model at BKK, such as the ones in place at Seoul Incheon and Hong Kong International Airports. This would have put cosmetics and


liquor and tobacco on each side of the airport.


Concession model debate The nature and size of the stores would have depended on the space and passenger footfall. But crucially, there would have been more than one category on each side. According to a TRA document forwarded to TRBusiness at


the


time the tender model was being publicly debated, AoT opted against the concession by category model because it believed managing space in an airport was different from a department store. AoT is also believed to have deemed the model unfavourable


due to fears of ‘uncertain and uneven’ passenger dispersal around the airport. The Thai Retailers Association


explained: “In some areas, passengers are clustered at the boarding gates and not spread out like they are in shopping malls. “If the space is divided by category,


then category A products might be on the left side and category B products on the right.” The association added: “If


concessions are separated, some operators may experience drastic changes in passenger traffic going into their stores. “This would also make spaces


in the airport visibly different from each other in terms of sales promotions and service standards and create comparisons and confusion for passengers.” Amid all the criticism of the single- contract concession on the table at


“If concessions are separated, some operators may experience drastic changes in passenger traffic going into their stores.”


Thai Retailers Association TOP 10 OPERATORS 61


Above: King Power International walkthrough at Bangkok Suvarnabhumi International Airport.


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