Korea Customs Service confirms Lotte (DF1) and Hyundai (DF2) as winners of Incheon Airport duty-free concessions

SOUTH KOREA. The Patent Examination Committee of the Korea Customs Service today (26 February) confirmed Lotte Duty Free and Hyundai Duty Free as the winning bidders for the Incheon International Airport DF1 and DF2 concessions.

As reported, Lotte Duty Free was named the preferred candidate for the DF1 business by Incheon International Airport Corporation (IIAC) following the recent tender and Hyundai Duty Free for DF2.

Under the Korean regulatory system, Korea Customs Service had then to assess the offers. However, given that no other parties bid – including the incumbents Shinsegae Duty Free and The Shilla Duty Free, who each quit their contracts last year having failed to renegotiate terms with the IIAC in attempts to stem heavy losses – the regulatory body’s decision was widely seen as a rubberstamping exercise.

One company could not win both contracts, each of which embraces (separate) perfume & cosmetics and liquor & tobacco offers across multiple stores (see table below).

Lotte Duty Free will operate 15 stores across some 4,094sq m of space, selling perfumes & cosmetics, liquor and tobacco. The retailer offered a minimum guarantee (VAT included) of KRW5,345 (US$3.68) per departing passenger for DF1 and Hyundai KRW5,394 (US$3.72) – see concession scope table below.

Commenting on today’s KCS decision, Lotte Duty Free said: “The company expects that the operation of the business rights won this time will have an annual sales increase of more than KRW600 billion (US$420.6 million).

“In the future, we plan to conduct a thorough handover according to the guidelines of Incheon International Airport to minimise passenger inconvenience.

“After the start of business, we plan to build a comfortable customer flow through sequential renewal and attract a variety of brands and products that keep up with the trend of domestic and foreign travellers.

“Furthermore, we will introduce digital experiential elements in the right place to increase the convenience of duty-free shopping. To this end, we will work closely with Incheon International Airport Corporation.”

The company added, “Lotte Duty Free has acquired the Incheon Airport DF1 duty-free business licence and will resume operations at Incheon International Airport, the gateway to Asia.

“It has been about three years since the closure of the Terminal 2 liquor and tobacco store on June 30, 2023, and the business period is until June 30, 2033, about seven years after the start of business.

“According to applicable laws, you can request contract renewal for up to ten years.”

The Moodie Davitt Report has approached Hyundai Duty Free for comment.

As reported, Hyundai Duty Free, which already runs the DF5 boutiques concession at Incheon, will be pleased to extend its airport presence to complement the downtown Trade Center business in Gangnam, Seoul. The travel retailer closed its Dongdaemun, Seoul store on 31 July 2025, a victim of challenging market conditions.

Shilla and Shinsegae are set to exit their multi-store Incheon contracts on 17 March and 27 April 2026, respectively.

The new concessions will run from the starting day of operation until 30 June 2033 (the tenure can be extended once during the concession period with a ten-year limit). ✈