Food
As anticipated, the ‘record-breaking’ figure surpasses the $2bn registered in 2016. The result places Incheon ahead of Dubai Duty Free, which recently reported duty free sales of $1.93bn in 2017.
Many had viewed the THAAD crisis and security issues surrounding North Korea as tempering the South Korean airport’s annual revenue.
“Incheon Airport Duty Free, however, did pretty well tackling those security issues recording the highest duty-free sales figure, beating previous records,” Bum-Ho Kim, Deputy Executive Director of Incheon Airport Corporation’s (IIAC) Concession Development Group said.
“Moving into 2018, Incheon Airport expects further growth with our humble prospects of reconciliation with North Korea as well as the end of THAAD crisis with China.”
In a statement, IIAC confirmed perfumes and cosmetics as the best-selling category with sales of $774m, accounting for 38% of total annual sales.
Liquor and tobacco took second place with $459m, while leathergoods clocked in sales of $301m.
The $2.1bn return has to be regarded as impressive given IIAC’s acknowledgement said on frequent occasions that the situation concerning THAAD on the fortunes of South Korea’s duty free market remains a challenging one.
However, it is worth noting that rising numbers of Korean and international passengers have helped the airport to offset the impact of diminishing Chinese passenger spends in recent times.
In reaction, Incheon has moved to diversify its retail offer over the past few years, confirmed Kim in an in-depth interview in the Top 10 Airport’s report in August.
IIAC confirmed these sentiments in a statement, stating it has ‘confronted these challenges by diversifying [its] customer demography, offering customer-friendly promotions with first-hand experiences, and inviting global and local brands, not to mention increasing passenger traffic’.
Five-year concession contracts were awarded in 2015 to SM Duty Free, City Plus Duty Free, Samick Duty Free and Entas Duty Free with Shinsegae Duty Free, which operates a 2,856sq m fashion store in T1, also adding new luxury brands such as Moncler.
As reported, Lotte Duty Free and Shilla Duty Free secured the eight-year liquor, tobacco and food and perfumes and cosmetics concessions, respectively, for the the new T2 last year, with Entas Duty Free, SM Duty Free and City Plus scooping the SME lots.
Meanwhile, the 4,889sq m re-tendered fashion & accessories concession was secured by Shinsegae Duty Free.
Terminal 2’s retail area covers an impressive 9,597sq m, boasting a number of flagship stores offering unique shopping experiences.
These include make-up showcases from the likes of Chanel, Dior, Sulwhasoo, Lancome, SK2, and Estée Lauder and liquor & tobacco areas featuring tasting bars and new concepts from Ballentine’s, Johnnie Walker, Royal Salute, Hennessy, KT&G and IQOS.
“In 2018, Incheon Airport is hoping to see further increases in our passenger traffic thanks to the opening of Terminal 2 and better political circumstances,” Kim added. “Incheon Airport Duty Free is set to embark on new leap with T2, as well as T1, to satisfy passengers visiting Incheon Airport and lead with the best airport shopping environment.”
