SOUTH KOREA. Incheon International Airport Corporation (IIAC) is to issue a tender for its DF1 and DF2 contracts (see table below for details) early next month, following the quitting notices served recently by incumbents The Shilla Duty Free (DF1) and Shinsegae Duty Free (DF2).
As reported, Shilla and Shinsegae are expected to exit their multi-store contracts on 17 March and 27 April 2026, respectively, in response to heavy operating losses and their failure to renegotiate financial terms with IIAC. Each contract embraces liquor & tobacco and perfumes & cosmetics.
IIAC plans to select new operators for both stores through international competitive bidding, sources close to the tender confirmed to The Moodie Davitt Report {we are awaiting comment from IIAC}.
In the 2022 bid (see tables below), IIAC proposed a minimum per-passenger fee of KRW5,346 (US$3.66) for the DF1 concession won by Shilla with an KRW8,987 (US$6.16) per passenger offer +68% higher.
For DF2, IIAC proposed a minimum KRW5,617 (US$3.85) baseline for the contract secured by Shinsegae’s KRW9,020 +61%.
IIAC plans to lower the per-passenger fee in this bidding, the report said (we are awaiting confirmation from the corporation). An IIAC official told Khan.co.kr (the website for influential Korean media The Kyunghyang Shinmun), “We will refer to the business data submitted to the Incheon District Court by the two duty-free shops when they filed for compulsory mediation, requesting a -40% rent reduction.
“Since the two duty-free shops returned their concessions due to high rents and operating losses, we have no choice but to lower the per-person fee.” {Main story continues following the communication below}
Who will bid?
As noted, both Shinsegae and Shilla can bid (albeit with a points deduction prompted by their premature departures), as can (and most certainly will) heavyweight Korean rival Lotte Duty Free.
Hyundai Duty Free, which won DF5 last time around but did not bid on DF1 and DF2, may find both contracts too much of a stretch, even on a reduced per-passenger minimum. However, it is still likely to table an offer.
China Duty Free Group, which participated in vain last time, could bid, perhaps sensing a more realistic chance of success this time around. Certainly the group has an acute understanding of the all-important Chinese consumer, an important part of the Incheon business (though less so than in Seoul’s downtown duty-free stores.
The Kyunghyang Shinmun quoted the Incheon International Airport Corporation representative as saying: “Currently, we are receiving inquiries from several domestic and international duty-free retailers regarding the bidding. It doesn’t appear likely that the bidding will be too demanding for them.” ✈
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