Changi L&T win an ‘electrifying moment’ for Lotte DF

By Andrew Pentol |


The liquor and tobacco tender is Changi Airport Group’s most significant leasing exercise since the last round of tenders for the liquor and tobacco and perfumes and cosmetic concessions in 2013.

Additional reporting by Luke Barras-Hill

Lotte Duty Free has described the capture of the six-year liquor and tobacco (L&T) contract at Singapore Changi Airport, announced by Changi Airport Group (CAG) today (24 October), as ‘an electrifying moment’.

The Korean powerhouse overcame stiff competition from arch rival The Shilla Duty Free (Shilla), which runs the four-terminal beauty concession at the airport, and Gebr. Heinemann, which has its Asia Pacific office in Singapore and a strong and developing Asian DF&TR footprint.

Reacting to the win, a Lotte Duty Free source told TRBusiness: “First of all, the stores guarantee huge sales and we think the concession will accelerate foreign expansion.”

The Korean operator already has several overseas businesses in countries such as Australia, Japan, ThailandVietnam and Indonesia. But this particular triumph will be particularly sweet, given it has missed out on snaring several important concessions in the past 16 months.


It missed out on the chance to win back its re-tendered non-liquor and tobacco Terminal 1 concessions at Incheon International Airport and more recently lost out to King Power in the Bangkok Suvarnabhumi International Airport tender, where Lotte bid in a joint venture with Bangkok Aviation and Bangkok Airways.

The spokesperson added: “For a couple of years, we’ve lost a few opportunities so it is an electrifying moment to win the big concession. It will be a huge turnaround for us. CAG is really interested in the online business and I believe we can cooperate on a lot of things.”

The L&T tender was Changi Airport’s most significant leasing exercise since the last round of tenders for the L&T and perfumes and cosmetics concessions in 2013. Commencing on 9 June 2020, the new agreement covers all 18 liquor and tobacco stores across Changi’s four terminals, spanning more than 8,000sq m of retail space.

A careful transition between the incoming and outgoing tenants will be planned, with renovation work to be undertaken in phases. This will ensure customers continue to enjoy a high standard of service.

The fact the liquor and tobacco concession was even up for grabs surprised many, as long-standing incumbent DFS Group had held the concession since 1980 and forged a strong partnership with CAG over the many years that followed.

Having agreed a two-month contract extension with CAG earlier this year (the tenancy now expires on 8 June 2020), after going back on a two-year extension announced in 2018, DFS was expected to participate in the tender, perhaps in the hope of negotiating more favourable terms.

On the flip side, however, it wasn’t long ago that DFS exited another major Asian Hub — Hong Kong International Airport (HKIA) — where it relinquished its core duty free contracts at the end of 2017.

Since exiting the HKIA contracts, DFS’ parent company LVMH Moët Hennessy Louis Vuitton – its Selective Retailing Division includes the travel retailer – has highlighted the strong performance of the operator’s downtown operations in Macau, Hong Kong, Cambodia and Venice on several occasions. Perhaps this is an indication that DFS is placing stronger emphasis on its existing downtown businesses and opportunities on the domestic market.


Lotte Duty Free can now add Singapore to its list of overseas businesses which includes Brisbane International Airport in Australia.

Meanwhile, CAG has described the awarding of the L&T concession to Lotte as an exciting new chapter in the airport’s retail history. This is because it is the first time a new operator is taking control of this key concession.

In August 2019, when it emerged Lotte had participated in the tender, a spokesperson for the retailer told TRBusiness it was confident that its strong online business would tip the balance during the evaluation process. Fast-forward a couple of months and it certainly seems its online and omnichannel efforts paid off.

CAG said: “The proposal from Lotte stood out with its strong omnichannel and marketing ideas which will propel CAG’s travel retail strategy. Lotte, the world’s second largest travel retailer in terms of sales turnover, possesses extensive experience in the travel retail industry including in the liquor and tobacco segment.

“With concession experience in markets like Australia, Japan, New Zealand, South Korea and Vietnam, it has a proven track record of operating at a scale similar to that at Changi Airport and possesses deep consumer understanding.

“Lotte has also won multiple awards over the years for its branding, marketing and customer satisfaction, the latest of which is the Technology Success Story of the Year at the Frontier Awards in Cannes. The CAG-Lotte partnership will leverage the strengths of both parties to grow the concession at Changi Airport.”


Kap Lee, CEO, Lotte Duty Free at the opening of the retailer’s 506sq m shop at Hanoi Nội Bài International Airport Terminal 2 in Vietnam earlier this year.


The award of the concession concluded a detailed evaluation process that commenced after the tender closed on 26 August 2019. The original deadline for submissions was 5 August 2019, but interested parties were given more time to compile ‘robust and compelling’ proposals. According to CAG, proposals were evaluated on a holistic set of criteria covering qualitative and quantitative factors.

Once Lotte begins operating in June 2020, passengers will be able to enjoy a wide range of L&T products. All stores will have fresh designs to appeal to connoisseurs and new consumer segments, particularly millennials.

The Terminal 3 liquor and tobacco duplex store will experience a complete revamp of its store façade to maximise visual impact and visibility into both levels of the shop. In addition, all stores will be infused with lifestyle elements and packed with experiential activations, such as product personalisation in the form of customised whiskey blending.

Outlets will also feature new boutique concepts and specially curated zones comprising the latest and trendiest products in the market. All this, together with various annual large-scale consumer events, will enhance the shopping experience at Changi Airport, promised CAG.


DFS Group had held the liquor and tobacco concession at Singapore Changi Airport since 1980.

Lim Peck Hoon, Executive Vice President Commercial, Changi Airport Group said: “The liquor and tobacco concession is one of the largest at Changi Airport and presents unique opportunities for marketing innovation and customer engagement. We were deeply impressed with the high quality of the tender proposals and it was not an easy decision to make. We thank all the parties for their participation.

“Lotte put forth the strongest and most compelling proposal overall. It is aligned with CAG’s vision to offer passengers a seamless omnichannel retail experience and new retailtainment initiatives leveraging smart technologies. Lotte also demonstrated a keen understanding of the market environment with a sound business plan, supported by a competitive financial bid and backed up by solid business fundamentals.”

Kap Lee, Lotte Duty Free, CEO commented: “I express my deep gratitude to Changi Airport Group for acknowledging Lotte Duty Free’s strength and strategy. Winning Changi Airport’s liquor and tobacco duty free concession is of great significance in terms of establishing a bridgehead to achieve our vision of  ‘Global No.1 Travel Retailer’. Lotte Duty Free will put its continuous efforts to grow as a global brand with Changi Airport.”

The news will obviously comes as a disappointment for rival bidders Shilla and Gebr. Heinemann. TRBusiness has reached out to both parties for comment.

For a detailed report on Lotte Duty Free, see the TRBusiness Top 10 International Operators 2019. Click here to subscribe.

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