Duty free sales revenue at Incheon International Airport is expected to grow by at least 15% to around $1.76bn (in US$) in 2012, following record sales of Won.1.699 trillion (US$1.53 billion) last year, according to Sang Ho Lee, Senior Manager of Incheon International Airport Corporation’s (IIAC) Marketing Planning Team.

Talking exclusively to the Travel Retail Business, he said:

“Our duty free sales went up by 21% in US Dollar terms in 2011 and I guess this year sales will grow by more than 15% in dollars which would be over $1.76 billion; but it is hard to forecast.

 

 

“Mainland Chinese passengers are contributing mainly to our duty free sales growth. We expect more Chinese visitors will come to South Korea than last year, so we see our business trend as positive.”

CHINESE UNDERPIN SPENDING GROWTH

The expected continued growth in Chinese passenger numbers at Incheon Airport is expected to lift total international passenger numbers this year, although an official forecast has not been released.

“It’s too early to say international passenger numbers in 2012 – but I guess it will be over 7% or 8% growth,” Lee said, noting that 17.2m international passengers used Incheon Airport last year. Seoul and Jeju Island are the two major destinations forChinese visitors and as the number of Chinese visitors increases, so does the range of duty free goods being purchased.

“Chinese passengers prefer high-end items such as watches and leather bags, but recently their shopping has expanded to include everyday items; even medium and low-priced goods, but they still prefer big ticket items,” Lee remarked. “The popular brands in our airport shops include Louis Vuitton, Gucci, Channel, Hermès, Omega, Rolex, IWC and Cartier.”

KOREAN BUYING POWER STILL STRONG

Meanwhile, South Korean passengers continue to display strong buying power with the number of Koreans travelling abroad set to rise: “Sales to South Korean passengers are going well. More South Koreans will go overseas than last year. They are going toChina, East Asia and the United States,” Lee said.

Japanese passengers are also important customers in Incheon Airport’s shops. However, Japanese spending has been under pressure for the past year and this has been more than offset by the growth in Chinese passenger spending.

“The Japanese Tohoku earthquake influenced our airport business for a short time and then it recovered,” Lee said. “There is still a problem as the Japanese economy is not so good.”