INCHEON AIRPORT DUTY FREE BIDDING RESUMES

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Duty free stores are expecting their sales to recover as international travel resumed with the easing of COVID-19 restrictions. The bidding for Incheon Int’l Airport duty free stores is to resume after 3 years, and it seems like China is making a bet.

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The number of travelers shopping in the duty free area of the departures section of Incheon International Airport has been growing lately.

[Soundbite] Yoo Young-min(Seoul resident) : "I’m going to shop here and get my purchases before departure. I can tell there is more energy now than during the pandemic."

The stores have seen their sales recover to half the pre-pandemic level. As demand for air travel rises, the duty free sector hopes to see things improve soon. Bidding for duty free shops is to resume soon after three years of suspension due to the COVID-19 pandemic. This year, the number of duty free sections at the airport has been cut from 15 to seven. The right of operation is guaranteed for 10 years.

[Soundbite] Lim Sung-bin(Incheon Int’l Airport Corp.) : "We evaluate the bidders’ ability to attract competitive brands and lure customers with attractive store decor."

Each company can acquire licenses for up to two sections. What's particularly noteworthy is the state-owned China Duty Free Group, which topped the global ranks in terms of sales during the pandemic. It is currently preparing to bid for duty free shops by attracting domestic and overseas brands. Korea's duty free sector believes the Chinese company will offer high bid prices given its financial capacity. Korean companies are worried they may lose their Chinese customers, who used to account for a large share of duty free shops' sales at Incheon Airport.

[Soundbite] (Duty free shop staff) : "We have no choice but to step up marketing on Chinese customers. Chinese tourists will likely prefer duty-free shops run by Chinese companies."

But when competition is fierce, it may be an opportunity for consumers to buy products for lower prices. Domestic duty free companies, which have so far competed only among themselves at domestic airports, may need a new strategy to lure customers.