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On-arrival duty-free stores open doors today

May 31,2019
The first on-arrival duty-free shops at Incheon International Airport opened today, but whether they will be able to boost the domestic economy as the government has intended remains unclear.

On-arrival duty-free shops opened in Terminal 1 and Terminal 2 of Incheon International Airport. SM Duty-free operates two stores on the first floor of Terminal 1, while Entas Duty-free runs a single store on the first floor of Terminal 2. Both are located near the baggage claim areas.

The purchase limit at the on-arrival duty-free shops is $600, meaning all the products sold there will be priced below that amount.

The opening of the on-arrival duty-free stores expands travelers’ purchase limit to $3,600 from the previous $3,000 that can be spent at duty-free shops in cities or the airport departures area. But the amount of tax exempted will remain at $600, meaning spending above $600 will be taxed.

Domestic products will be prioritized.

Yet despite government efforts to lift the domestic economy, experts question the effectiveness of on-arrival duty-free stores because of the unchanged tax exemption amount.

“On-arrival duty free has expanded the number of channels that customers can purchase products, but they will not likely raise people’s overall spending due to the unchanged amount of tax exempted,” said analyst Lee Ji-young from NH Investment & Securities. “Whether they will bolster the domestic economy is questionable.”

But having more domestic duty-free operators could lead to increased sales in Korea.

“Although expensive luxury goods are not available at the on-arrival duty-free shops, having more domestic operators could result in more spending within the country,” said analyst Lee Seung-eun from BNK Securities.

BY JIN MIN-JI [jin.minji@joongang.co.kr]


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