Incheon Airport T1 duty free bidding in success in 4 times
Park Min Yeong | ironlung@ | 2018-05-24 10:33:21

The duty-free bidding at Incheon International Airport Terminal 1 (T1) may succeed due to the lowest bid price cut and recovery of the Korea-China relationship.

According to Incheon International Airport Corporation, Lotte & Silla, Shinsegae and Dota Duty Free participated in the tender for the T1 duty-free bidding. The Hyundai Department Store Group, Hanwha Galleria, Dupree, etc. who participated in the bid briefing last month did not make a final bid. The bidding is expected to be conducted for the DF1 and DF5 areas this year when the Lotte Duty Free Shop decided to withdraw from the market due to the rent burden. DF1 combined DF1 (perfume and cosmetics) and DF8 (all-inclusive), while DF5 (leather and fashion) are separate business areas. Incheon International Airport Corporation will conduct a presentation and screening on May 28 to May 30 at the price bidding on May 24. The Korea Customs Service will finalize the project next month and start business in July.

T1 duty-free bidding was hot from the start. The minimum bidding price, which is 30-48% lower than the existing price, the minimum bids for DF1 and DF5 are W161.1bn and W40.6bn, respectively. In the bidding briefing session held on the 20th of last month, 9 companies including Lotte ? Silla, Shinsegae, Hyundai Department Store, Hanwha Galleria, Doosan, HDC Silla, Dupree and Dupree Thomas Julie Korea showed great interest. Lotte, Silla, and Shinsegae were the strongest players, but it is notable that Doosan, the new operator, has thrown out the runway. An industry official said, "The airport duty-free shop seems to have decided to enter the airport duty-free shop because of its high population and high brand promotion effect."

On the other hand, the bid is expected to serve as a screening variable by introducing the `withdrawal penalty` for the first time. It is a system that gives a deduction to a business operator who operates an outbound duty free shop and terminates during the contract period. Lotte, Silla and Shinsegae duty-free shops are currently at the airport. The Lotte Duty Free shop has returned to Incheon International Airport in March, and the Shinsegae duty free shop was withdrawn from the Gimhae airport duty free shop in 2015. The Shilla Duty-Free Shop has abandoned the Incheon International Airport duty-free business in 2001, but may not be penalized after the penalty period (3 ~ 5 years).

Also, Incheon International Airport Corporation will select two high-scoring operators by combining the business proposal score (60 points) and price evaluation (40 points). The KCS finalizes one operator through the Patent Examination Committee. Product and brand composition planning, customer service ? marketing, store operations plan, management status and operational performance, investment, sales and cost planning.

By Park Min Yeong ironlung@

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