Shinsegae Duty Free lands fashion & accessories contract at Incheon Airport T2

1 min readUpdated Jun 4, 2025Jul 6, 20171:31 AM

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Shinsegae Duty Free has been awarded the fashion & accessories contract at Incheon International Airport Terminal 2. The DF3 concession covers 14 stores embracing 4,889 square meters of retail space.

It draws a line under troubled period for the concession, which was retendered multiple times with successively reduced minimum guarantees in an effort to attract interest.

Bidding was negatively affected by the perceived high cost of entry and the recent collapse in Chinese tourism caused by the THAAD dispute between South Korea and China. Last year the Chinese represented almost 50 percent of total arrivals and generated around 65 percent of duty free spending. Chinese visitor arrivals have fallen dramatically so far in 2017, by -40 percent year-on-year in March, -66.6 percent in April, and -64.1 percent in May.

In the end, Incheon International Airport Corporation decided to directly negotiate a contract with Shinsegae and requested the Korea Customs Service (KCS) to hold a patent examination committee.

If the selection of operators is delayed, it is difficult to open 2 terminals until January next year.

As reported, the other T2 contracts have been awarded as follows: DF1, The Shilla Duty Free; DF2, Lotte Duty Free; DF4 SM; DF5 Entas Duty Free; DF6 CItyPlus.
The new terminal is due to open in the final quarter of this year.

Shinsegae will proceed with negotiations with Incheon International Airport Corporation on specific matters related to the duty-shop business contract in the future.

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What this means

This direct negotiation by Incheon International Airport Corporation, foregoing a traditional tender after multiple failures, signals a pragmatic shift to secure operators for the new terminal. Shinsegae's move is likely strategic, capitalising on reduced entry costs and the immediate need to fill T2, even amidst the significant collapse in Chinese duty-free spending. It pressures Lotte Duty Free and The Shilla Duty Free, who secured DF2 and DF1 respectively, to perform strongly in a challenging environment. The risk lies in the concession's profitability should Chinese tourism not recover sufficiently, given the 65 percent reliance on their spending previously. The airport's urgency is clear; they cannot delay T2's January opening. We should watch the specific terms Shinsegae secures for its duty-shop business contract.

Minjun Park

Questions & Answers

Why was the contract retendered multiple times before Shinsegae was awarded it?

The bidding process was negatively impacted by the perceived high cost of entry. Also, the recent collapse in Chinese tourism, due to the THAAD dispute between South Korea and China, reduced interest in the concession.

What impact has the decrease in Chinese tourists had on duty-free spending?

Last year, Chinese visitors accounted for around 65 percent of total duty-free spending. Their dramatic fall in arrivals, by over 60 percent in some months this year, would significantly impact this revenue.

Which other companies have secured duty-free contracts at Incheon Airport Terminal 2?

The Shilla Duty Free was awarded DF1, Lotte Duty Free secured DF2, SM received DF4, Entas Duty Free has DF5, and CItyPlus was awarded DF6. Shinsegae took the DF3 contract.

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