Lotte Duty Free is hoping to expand its duty free operations at Jakarta Soekarno-Hatta International Airport and other locations in Indonesia.

Lotte Duty Free Indonesia Managing Director and Sales Director Ma Sung Won told TRBusiness recently that the retailer is planning to open new duty free shops at Jakarta Airport’s Terminal 3 and Ngurah Rai International Airport in Bali, after celebrating the first anniversary of duty free trading at the airport.

The newly opened Terminal 3 is currently used mainly for domestic flights, but also has gates designed for A380 aircraft, which will be used, for regular services to Jakarta Airport in future.

“Our turnover is better than we expected, so we are negotiating with Jakarta Airport for a new sales area. Maybe we can get some space to expand our business,” said Ma. “The categories will depend on the size of the shop. Maybe fashion brands will come.”

 

Lotte Duty Free’s second Jakarta Airport store.

 

Lotte Duty Free already operates two airport shops at Jakarta, plus a 5,000sq m downtown store spread over two floors in the Lotte Shopping Avenue Mall in the Ciputra World 1 shopping and commercial complex.

One sells fashion goods and general merchandise and the other P&C and L&T. The retailer has also reported growing sales at Jakarta Soekarno-Hatta International Airport where it operates shops selling perfume and cosmetics, liquor and tobacco, fashion goods, watches, confectionery, gifts.

 

An inside view of Lotte Duty Free’s Jakarta downtown duty free store.

 

NEW TENDERS EXPECTED

Opened in January 2012 and located in Terminal 2, these outlets are run in joint venture with local partner, PT SJ-Indonesia which holds a 10% stake next to Lotte’s 90%. The shops are almost equal in size, equal to 870sq m in combined area.

Around 7m international passengers used Jakarta Airport in 2013, of which about 60% are estimated to be religious pilgrims travelling to Mecca who are transiting in Jakarta Airport from other Indonesian cities on their pilgrimages. These travellers do not use the shops on their outbound travels.

“From the beginning our main airport shop customers have been South Koreans, then Chinese, Japanese and Indonesians; but now the main customers are Chinese passengers – number two are South Koreans, Indonesians number three and then Japanese passengers,” said Ma.

 

Lotte Duty Free’s 5,000sq m Jakarta downtown store spread over two floors in the Lotte Shopping Avenue Mall.

 

As reported, Lotte is also expected to be one of several operators bidding for three duty free concessions due to expire in Jakarta Airport T2, with two of these currently operated by Plaza Bali and the other by DFS Indonesia.

Tenders for the three shops are expected to be issued by state-owned airport operator, PT Angkasa Pura (AP) II later this year. The retailer also confirms that it remains interested in operating duty free outlets in other Indonesian airports.

[TOP IMAGE: Lotte Duty Free at Jakarta Airport].