Hyundai Duty Free took on the DF2 space at the end of April under a new concession contract.

Asia-Pacific’s busiest hub for international traffic has had a concession reset and, with some tweaks, its operator is pushing hard for even bigger retail sales in 2026.

South Korea’s Incheon Airport (ICN) has had a stellar rise up the ACI World rankings of the world’s busiest hubs. From seventh place in 2023, the gateway jumped to third in 2024 as traffic surged by +27%. The hub maintained that position in 2025. Last year, international passenger numbers grew by a solid +4.1% to reach 73.6m out of a total 74.1m, a new record.

The airport’s post-Covid rebound has come at the same time as some major hiccups on the retail side of the business. Operator Incheon International Airport Corporation (IIAC) had to retender large parts of the retail floor, for example, the DF2 space which Shinsegae Duty Free pulled out of due to a dispute over rents. Hyundai Duty Free took on the area at the end of April under a new concession contract. Shinsegae still has a footprint at ICN with the DF4 space, and the retailer recently reopened a Cartier boutique.

Meanwhile, Lotte Duty Free won a seven-year concession for the DF1 retail space at Incheon that had been operated by The Shilla Duty Free. The latter is now locked in a lawsuit with IIAC over exit penalty fees. For Lotte, the win marked a return to the airport in mid-April, approximately three years after the closure of its liquor and tobacco concession in Terminal 2. The DF1 space covers just over 4,000sq m, with 15 stores focused on beauty, liquor, and tobacco.

Speaking to TRBusiness, Jimin Lim, Manager, Duty Free Management at IIAC, said: “The past 12 months have been particularly busy for ICN due to the onboarding of new operators. They all completed their store openings in April and are now operating successfully. We are pleased with the diversity of our tenant mix and brand portfolio.”

At Lotte, Daehyun Ahn, Head of the Strategy & Planning Division said that the DF1 zone would give the retailer an annual sales uplift of more than KRW400bn/$258m, adding: “Our Incheon entry strengthens our negotiating position with brands and opens up merchandising synergies – particularly in liquor, where we can leverage our Singapore Changi store – combined with digital and experiential elements to lift dwell time and conversion.”

Chinese travellers remain the core non-Korean shopper segment at ICN.

Wooing the Chinese market

The mainstay of South Korean duty-free has traditionally been the Chinese traveller. While their per-head spending has declined post-Covid, they remain the core non-Korean shopper segment at ICN, and efforts are ramping up from all retailers at the airport to target them more precisely.   

Lim at IIAC takes a pragmatic approach, commenting: “Trends in the retail industry are constantly evolving, and the ability to adapt to, and overcome, change is essential. We view the recent decline in spending among Chinese passengers as one of the key challenges we must address.

“In response, we are working to create new reasons for customers to visit and shop with us through seasonal promotions, the introduction of new brands, and other initiatives. We also have several entirely new shops currently in development, and together with the efforts of our new operators, we are optimistic about achieving sales growth over the next 12 months.”

The past 12 months have been particularly busy for ICN due to the onboarding of new operators.

The decline in spending by Chinese passengers at ICN is not to be underestimated. It has been one of the most significant shifts in consumer behaviour that IIAC has had to deal with, and was one reason for Shinsegae pulling out of concessions at the airport. But there are signs that conditions are improving.

A shifting value pool

China Trading Desk’s Q2 2026 outbound sentiment survey indicates that the market is active again “but no longer defined by simple recovery”. The wider 2026 outlook points to a large opportunity base – 184m outbound trips and $265bn in traveller spend – but, says CTD, “the value pool is shifting toward travellers and categories that can convert intent into actual spend”.

While Singapore ranks first as a travel destination for the Chinese, South Korea and Malaysia are close behind. Gen Z is showing a stronger preference for Korea, possibly because of the K-pop frenzy that’s been a feature of 2026 so far. This has allowed downtown retailers in Seoul, in particular, to take advantage by selling related merchandise.

The past 12 months have been particularly busy for ICN due to the onboarding of new operators.

From IIAC’s perspective, demand for duty-free shopping has softened compared with previous years, while interest in other retail channels, for example the downtown duty-free market, has increased.

However, Lim is upbeat and tells us: “At the same time, passengers are placing greater value on unique, experience-driven offerings that cannot be replicated elsewhere. We are therefore planning to introduce new retail spaces and concepts designed to provide distinctive experiences that customers can enjoy exclusively at Incheon.”

IIAC did not elaborate on what these spaces and concepts will consist of – but it is confident that the new retailer mix and offer to passengers it now has in place will bring results. Based on the average KRW/USD exchange rate for each year, the airport operator achieved retail sales of $2.05bn in 2024, and $2.32bn in 2025.

While the company did not forecast a figure this year, Lim said: “For 2026, we expect sales growth driven by partnerships with new operators, as well as the introduction of more customer-friendly stores and promotional programmes.”

*Based on the exchange rate on 30 June 2026: KRW1000 = USD0.64.

This feature first appeared in the Top 10 Airport report in the July issue of TRBusiness. Click here to read.

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