SOUTH KOREA. In major breaking news, Lotte Duty Free, Shinsegae Duty Free and Hyundai Department Store were today awarded new downtown duty free licences in Seoul after a dramatic five-way contest.
There was bitter disappointment though for HDC Shilla, which had bid for a second Shilla IPark duty free operation, and SK Networks, operator of WalkerHill Duty Free, which lost its long-time licence in the controversial November 2015 bid.
[UPDATE: For the latest reaction from Shinsegae Duty Free, click here and from Lotte Duty Free here].
The results change the competitive – and geographic – landscape of Korean duty free. All three stores will open in southern Seoul’s Gangnam shopping district. Until now, the city’s biggest duty free stores have been located in Myeong-dong.
Hyundai Department Store’s proposal ranked first with 801.50 points, just ahead of Lotte Duty Free World Tower with 800.10 and Shinsegae Duty Free with 769.60. Korea Customs Service only revealed the scores of the successful bidders.
Confirming the success to The Moodie Davitt Report, a Lotte Duty Free spokesman said the company was delighted with the news and the fact that it can re-open its acclaimed Lotte World Tower store whose closure was forced by the 2015 result.
In further breaking news, we can confirm that the SME licences have been awarded as follows:
- Seoul: Topcity (City Duty Free)
- Busan: Busan Duty Free Shop led by Busan Chamber of Commerce
- Gangwon province : Alpensia
Topcity scored 761.03 points for its successful proposal to operate a duty free shop in Sinchon in west Seoul at the railway station building.
Topcity is an affiliate of City Plus, one of several SME retailers at Incheon International Airport (where it trades as City Duty Free).
UPDATE: LOTTE AND SHINSEGAE EXPRESS DELIGHT
Reacting to the news, a senior Lotte Duty Free spokesman commented: “It is very good news for us because the 1,300 employees who had suffered deep anxiety over the past six months due to their expectations of returning to World Tower can finally go back to their original workplace.
“I would like to express my heartfelt gratitude to the jury members for their fair and objective examination to enhance the competitiveness of the duty free industry in Korea despite the heavy psychological burden [of the process]
“We are also grateful to all of our employees who have devoted themselves to the growth and development of Lotte Duty Free as a global duty free enterprise for the past 36 years.
“Lotte Duty Free will do its best to faithfully fulfil the business plan submitted to the Korea Customs Service in the future. Through aggressive investment and development of Korean Wave [Hallyu] content, we will be able to attract foreign tourists and create jobs, as well as co-exist with small and medium-sized enterprises, thereby fulfilling our social responsibilities and becoming a more mature company that contributes to the local economy and the national economy.
“Most of all, Lotte Duty Free will do our best to open up the future of tourism in Korea by raising the global competitiveness of the domestic tourism industry through a sense of greater responsibility.”
Shinsegae Duty Free Merchandising Team Director Seok-Ho Hong told The Moodie Davitt Report: “We are thrilled about winning the bid. It is great news for Shinsegae Duty Free as we will now have two downtown stores in Seoul [as well as the retailer’s spectacular shop at Centum City in Busan].
The store will be located in the long-established Shinsegae Department Store in Gangnam.
“The Gangnam store is really in a good place for the FIT tourism, so we’re going to make a great store there,” Hong said. “Gangnam has the express bus terminal which connects more than 150 bus routes across the Korean peninsula, so it’s really a hub for tourists. They can then spread out from the Gangnam store to every corner of the Korean peninsula.”
Commenting on the significance of the victory, he said: “The applicants for the licences included the giants of Korea’s duty free industry – Lotte, Shilla, ourselves and SK/WalkerHill, while Hyundai is a very big department store operator. All five contenders are very strong in the retail business so it was tough. But we finally made it and the company is very happy about it.”
“We’re planning to open by the end of 2017. So we have about a year to prepare, which is better than last time [in Myeong-dong in downtown Seoul] when we had just six months. So we’ll be able to start with a more complete store than in Myeong-dong.”
Hyundai Department Store Group President Jeong Seon-sun told our colleagues at KDF News* today: “We will raise the level of our duty free shop to a new level by implementing a differentiated offer. We will raise the quality to new heights… by improving the service quality of our shops, by energising the market and by stimulating good competition.”
*Note: The Moodie Davitt Report and KDF News have an exclusive information-sharing agreement
