Incheon Airport duty free sales hit US$2bn in 2016

By Charlotte Turner |

Incheon-Airport-Louis-Vuitton-heroSouth Korea’s Incheon Airport registered annual sales of KRW2,300billion (US$2bn) in 2016 +14.7% (YOY). However, IIAC’s Bum-Ho Kim, Deputy Executive Director of Concessions Development, tells TRBusiness that the decreasing buying power of the Chinese, along with stiff competition from downtown duty free operators remain concerns for 2017.

 

“Compared to 2015 with MERS and economic downturn, it was okay in 2016 recording $2bn sales in Incheon Airport duty free, likewise that of 2014,” Kim tells TRBusiness in the Global Industry Survey, which will appear in the January issue of TRBusiness magazine.

 

By hitting the $2bn sales mark, Incheon reclaims its title as the biggest single duty free airport market in the world, as Dubai Duty Free recently reported 2016 sales of $1.85bn.

 

More comments from Bum-Ho Kim feature in the Global Industry Survey inside the January issue of TRBusiness.

 

“As we move into 2017, the decreasing buying power of Chinese customers – due to Chinese government’s policy to boost domestic economy – volatile international politics, and the fast-growing e-commerce [channel], may mean that the travel business at the airport may face challenges, but we should tackle them,” adds Kim.

 

Lotte Duty Free Incheon Airport ©

In 2016 cosmetics & perfumes continued to be the best-selling category with US$770m, says Incheon Airport.

 

COMPETITION FROM DOWNTOWN DUTY FREE

In particular, Kim highlights the increasing number of downtown duty free stores as a major threat to the airport duty free market in Korea.

 

However, according to a statement released to the press this morning, IIAC says it was able to overcome the negative impact to sales, due to MERS and duty free shop renovation in 2015, to grow sales by +14.7% in 2016.

 

This is the second time that annual sales have reached US$2bn; the first time was in 2014.

 

Kim Bum Ho, Deputy Executive Director of Incheon International Airport Corporation’s (IIAC) Commercial Marketing Group

IIAC’s Bum-Ho Kim, Deputy Executive Director of Concessions Development.

In 2016 cosmetics & perfumes continued to be the best-selling category with US$770m, accounting for 39% of total annual sales. Liquor and tobacco followed with US$440m while leathergoods registered sales of US$280m.

 

“There were general concerns in 2016 due to volatile market environments in East Asia derived from geopolitical issues and excessive competitive market in Korea with increasing downtown duty free shops,” says IIAC.

 

SME PARTNERSHIPS PAY OFF

“Confronting these challenges, however, Incheon Airport Duty Free led increase in sales by enhancing smart shopping environment through renovation, offering customer-friendly promotions and providing diverse global and local brands, not to mention increasing passenger traffic.

 

“Also, partnership with seven duty free operators including four SME’s (Small and Medium Enterprises) contributed to such success.”

 

Il-Young Chung, President & CEO of Incheon Airport said: “Incheon Airport is expecting to open T2 duty free shops in 2017. Along with T1 duty free, we will do our best to satisfy passengers visiting Incheon Airport and lead global TR business with unprecedented fascinating and enthralling airport shopping environment.”

 

Middle East

JEDCO launches multi-category tenders at KAIA T1

Jeddah Airports Company (JEDCO KSA) has issued a request for proposals for several...

International

TR Consumer Forum 2024: Ticket sales now open

TRBusiness is thrilled to announce that you can now book your tickets to the TR Consumer Forum...

International

Alcohol insights: Conversion up, spend down in Q4

Conversion of visitors in the alcohol category in duty free has risen to 54% in Q4 2023,...

image description

In the Magazine

TRBusiness Magazine is free to access. Read the latest issue now.

E-mail this link to a friend