Lotte opens Jakarta Airport and downtown shops

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Friday, 03 February 2012 07:56

As exclusively reported by The Travel Retail Business three months ago, Lotte Duty Free has opened two new duty free shops at Jakarta Soekarno-Hatta International Airport.

This marks the first stage of the company’s plan to become the leading duty free operator in south-east Asia and Indonesia, according to Lotte Duty Free CEO, Young Soo Choi.


In addition, Lotte is also planning to open a 5,500sq m downtown pre-order duty free shop within its first Lotte Department Store in Indonesia, which is due to open in December of this year. This will be located in the 130,000sq m Ciputra World Mall in Jakarta that the group has leased and will operate as Lotte Shopping Plaza Indonesia.


Elsewhere in Indonesia, Lotte also plans to open duty free shops in Bali International Airport and a downtown pre-order duty free shop on the resort island.



As reported, the two new shops at Jakarta Airport represent the first overseas presence for the South Korean duty free giant, apart from a small duty free liquor space rented from Dufry within the latter's Moscow operation for a few months a couple of years ago.


The opening of the two Jakarta stores was attended by several guests, including two leading South Korean entertainment stars, with the January 31 official opening ceremony held four days after the shops opened for commercial trading on January 27. (An earlier report by The Jakarta Post incorrectly referred to one store, when Lotte has actually opened two).


Speaking directly to The Travel Retail Business this week, Lotte Duty Free Jakarta International Airport Project Manager, Tae Ho Kim, told The Business: “We have opened everything except for the Coach boutique. We have opened perfume and cosmetics, liquor and tobacco, fashion and general merchandise.


“The opening ceremony was good. There were no problems, so I am happy.”



In his opening speech, Lotte Duty Free CEO, Young Soo Choi, announced the Jakarta Airport shops were Lotte’s first international duty free operation outside of South Korea, which the company is targeting to become the biggest duty free retail operation in Southeast Asia.


“Travelling shoppers at Soekarno-Hatta International Airport in Indonesia are to enjoy the best shopping experience,” Choi said.


Lotte’s decision to open the two shops was welcomed by Jakarta Airport T2 Commercial and Business Development Director, Sulistio Wijavadi, who noted the airport handles more than 10m passengers a year and intends to create a world class shopping environment.


Local publicity surrounding the shop openings was also boosted by the presence of South Korean entertainment stars, Choi Ji Woo, heroine of the 'Winter Sonata’s' Korean soap drama and boy band 2PM member, Ok Tae Yeon - both Lotte Duty Free brand ambassadors.



Totalling 870 square metres in area, the two Lotte Duty Free shops are almost equal in size and located immediately facing passengers after they pass through immigration control in the shopping arcade connecting flight gate areas D and E in Terminal 2.


Lotte’s 420sq m corner shop at the entry to flight gate area D sells perfume and cosmetics, liquor and tobacco, and Korean ginseng products, while the company’s other nearby shop covering 450sq m sells fashion goods and general merchandise.


Lotte Duty Free is understood to have spent 40 billion rupiah ($4.45m) fitting out the two shops and the retailer is targeting modest initial sales of around $20m a year. In addition, it is looking to open more shops in Jakarta Airport and a downtown pre-order shop in Jakarta to boost future sales.


Among the leading international brands on sale in the Lotte shops, Estée Lauder and Chanel are positioned at the front of the perfume and cosmetics area, which also features a BB Zone displaying assorted BB (Beauty Balm) creams by various brands.


Premium and super premium brands lead the liquor offer, which includes Ballantine’s 30yo and Johnnie Walker Blue Label.


In the fashion and general merchandise shop Coach has taken one of two planned boutique areas (as yet to open) while the area originally planned as a second boutique has been divided into semi-boutiques for luxury brands, including Dunhill, Burberry, Montblanc and Longchamp.


Lotte Duty Free shop, JakartaCOACH TO OPEN IN MID-FEBRUARY

“Our Coach boutique will open about mid-February. We don’t know the date yet,” Kim said. “The Coach boutique will take some more time to complete.”


Work to prepare the two Jakarta Airport duty free shops got underway soon after Lotte Duty Free submitted the winning bid for the two outlets, which were offered in a single tender last July.


To comply with local laws forbidding foreign companies from being the sole operators of duty free shops, Lotte bid in joint venture with local partner, PT SJ-Indonesia.


Lotte holds a majority 90% stake in the joint venture company, which will be renamed PT Lotte Duty Free in the second quarter of this year. PT SJ-Indonesia holds the remaining 10% share.

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