Foreigner purchases up, Korean sales down as tender time approaches at Incheon International Airport

SOUTH KOREA. Duty-free sales nationwide (excluding inflight retail) fell -5.7% year-on-year in October and -1.8% month-on-month to KRW1,048,254,391,625 (US$741.3 million), according to newly released Korea Duty Free Association figures.

Customer numbers eased -0.9% year-on-year and -2.9% month-on-month to 2,543,230.

“October revenues show a steady stagnation of foreigner sales while airport sales are picking up,” a senior Korean travel retail source told The Moodie Davitt Report.

“Many industry people expect more Chinese to visit Korea while the diplomatic tension between China and Japan escalates.” [Look out for our story on that issue coming soon]

Sales to foreigners slipped -11.5% year-on-year and -3.8% month-on-month to KRW751,217,952.922 (US$511.9 million) on customer numbers up +0.4% year-on-year and down -10.5% month-on-month to 906,292.

Conversely, purchases by Koreans rose +13.4% year-on-year and+3.7% month-on-month to KRW297,036,438,703 (US$202.4 million) on a customer base down -1.7% over October 2024 and up +1.8% month-on-month.

Downtown decline

Total sales at Korean downtown duty-free stores (excluding JTO and JDC on Jeju island) declined -12.6% compared with October 2024 and -5.6% month-on-month to KRW742,934,913,193 (US$506.2 million), reflecting the softening Chinese spend. Foreigners accounted for a whopping 82.9% of downtown sales.

Sales to foreigners downtown slumped -16.4% year-on-year (and -4.8% month-on-month) to KRW615,865,265,581 on customer numbers flat (-0.6%) over October 2024 (-10% over September 2025).

Airport sales pick up

The airport departures channel presented a more positive picture with sales rising +22.2% year-on-year and +9.5% month-on-month to KRW254,821,027,612 (US$173.6 million) on a customer base up +2.8% over October 2025 and +0.6% month-on-month.

Foreigners generated 52.5% of those sales with Koreans accounting for the 47.5% balance despite the latter representing 56% of total customer numbers {main story continues following the communication message below}.

Almost tender time at Incheon

The October numbers will be closely scrutinised by retailers pondering bids for the forthcoming Incheon International Airport DF1 and DF2 tenders, which are up for grabs following the quitting notices served recently by incumbents The Shilla Duty Free (DF1) and Shinsegae Duty Free (DF2).

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 Incheon International Airport Corporation (IIAC). Each contract embraces liquor & tobacco and perfumes & cosmetics.

IIAC plans to select new operators for both concessions through international competitive bidding.

Shinsegae and Shilla can bid (albeit with a points deduction prompted by their premature departures), as can (and 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, is also contemplating an offer.

What of any foreign contenders? By far the most likely candidate is China Duty Free Group, which participated in vain last time. Will it return for a second bite at a very big cherry, 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 component of the Incheon business (though less so than in Seoul’s downtown duty-free stores).

Of the other industry heavyweights, Lagardère Travel Retail seems the most natural candidate with Avolta affected by the early 2024 ejection of the Dufry Thomas Julie joint venture from Gimhae Airport in Busan.

King Power International (Thailand), King Power Group (HK) and DFS (successfully) have previously participated or shown interest in Incheon tenders but none is likely to bid this time around. ✈