Lotte Duty Free withdraws from Incheon airport after 22 years

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Lotte Duty Free withdraws from Incheon airport after 22 years

Published: 03 Jul. 2023, 19:10 Updated: 03 Jul. 2023, 19:15

Incheon International Airport's duty-free zone on Sunday [NEWS1]

Duty free shops at Incheon International Airport have undergone a major revamp that was unveiled in July.

After losing in a bid to secure a spot at the airport back in April, Lotte Duty Free, the country's largest duty free operator, suspended its operations, while smaller rivals opened with a wider range of products and larger-scale operations.

In April, the Korea Customs Service and the Incheon International Airport Corporation selected new successful bidders for the rights to run duty-free outlets at the country's main gateway for the next 10 years. Lotte Duty Free offered a conservative bid, approximately 30 percent lower than its competitors, as it was concerned about the future profitability of its operations at the airport, ultimately leading to its withdrawal.

Lotte's withdrawal from Incheon airport after 22 years of operation since the airport's inception is expected to have a major impact on the ranking of Korea's duty free industry.

Shilla Duty Free, operated by Hotel Shilla, is the only company in the world that operates in all three major Asian hub airports — Incheon, Singapore, and Hong Kong. It occupies a space of 8,907 square meters (2.2 acres) across Terminals 1 and 2 at Incheon International Airport, offering a selection of over 400 brands. The shop features luxurious offerings from brands like Hermes, Chanel and Gucci, cosmetics and perfume stores offering Chanel, Dior and Estee Lauder products, and a variety of liquor and cigarette brands.

Shinsegae Duty Free began sales at 22 stores at the airport, showcasing products from 645 brands, at the beginning of the month. It plans a gradual expansion, aiming to operate a total of 29 stores covering an area of 9,907 square meters across Terminals 1 and 2 by the end of next year. Among their brand offerings are Cartier, Dior, Gucci, Bottega Veneta, Yves Saint Laurent, Tiffany and Co. and Bulgari.

Hyundai Department Store Duty Free started operating a 998-square-meter store in Terminal 2, where visitors can explore luxury brands including Tiffany and Co., Celine, and Fendi. It will also open a Terminal 1 store spanning 1,090 square meters on Aug. 1, with Louis Vuitton, Prada, Burberry, and Ferragamo among the brands on offer.

Lotte Duty Free is expected to focus more on downtown duty-free shops and its online platform.

On July 7, Lotte will resume regular operating hours at its flagship stores in Myeongdong, central Seoul, and World Tower Mall, southern Seoul, which had temporarily been shortened due to the pandemic. The extended operating hours will provide an additional 1 hour and 30 minutes to 2 hours of shopping time.

Lotte also recently introduced a dedicated section for duty-free liquor sales on its online duty free store, offering customers a selection of approximately 100 brands and 700 products.

"While it is hard to let go of the symbolic significance of operating at Incheon Airport for the past 22 years, we anticipate that the impact will be minimal as the contribution of airport sales to our overall revenue has been relatively low," said a spokesperson from Lotte Duty Free. "We plan to strengthen our presence in downtown duty-free shops and expand our global business with a focus on entering major international airports."

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]