Shilla Duty Free to open store in Hong Kong

A computer-generated image of the A&S Takashiyama duty-free store opening on April 27 in Tokyo. Hotel Shilla has a 20 percent stake in the store. [HOTEL SHILLA]

Shilla Duty Free has won a license to operate a store inside Hong Kong International Airport.

Hotel Shilla, the parent company of Shilla Duty Free, on Wednesday secured the right to sell cosmetics, perfume and fashion accessories inside the Hong Kong airport until September 2024. The scheduled opening date is the end of this year.

Located on the island of Chek Lap Kok, Hong Kong International Airport is one of the biggest and busiest in the world, visited by 70.5 million people last year and over 1,100 flights per day.

This new license makes Shilla Duty Free the first among its domestic peers to operate stores inside three of Asia’s busiest international transportation hubs including Incheon International Airport and Singapore Changi Airport, where the company stepped foot in 2013.

Shilla Duty Free also jointly operates a location in Macau International Airport with Chinese duty-free retailer Sky Connection.

Shilla Duty Free participated in an open bid for the license in February. Its competitors included Korean rival Lotte Duty Free. The state-owned China Duty Free Group also participated and won the license to sell liquor and tobacco.

Based on previous sales records, Hotel Shilla said it expects the Hong Kong International Airport operation to raise the revenue of Shilla Duty Free’s global business to 1 trillion won ($880 billion) this year from 500 billion won last year.

“Sales may go up even higher considering there are overseas branches that just opened in the winter and one preparing for launch this month,” the company said.

Last year, 15 percent of all sales at Shilla Duty Free came from global businesses.

Another store in the bustling commercial district of Shinjuku in Tokyo is set to open this month on the 27th. The store, A&S Takashimaya Duty Free, is a joint venture between Hotel Shilla, Japanese department store company Takashima and airline All Nippon Airways. Hotel Shilla has a 20 percent stake.

The duty-free store will occupy a 2,800-square-meter (30,000-square-foot) space on the 11th floor of the Takashimaya Times Square department store and be the first duty-free shop in Shinjuku.

Hotel Shilla has previous experience running duty-free shops located outside of international airports.

The retailer has a Shilla Duty Free location in Phuket City, Thailand, which the company opened in November as a joint venture with two other Thai companies.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]