Korea Airports Corporation (KAC) is hoping to receive approval from the government to issue a tender for a single duty free arrivals shop at Seoul Gimpo International Airport, later this year.

KAC would ideally like to conduct the process before the end of this year, however it is still in negotiations with several parties. Gimpo is just one of numerous arrivals duty free shops which KAC hopes to open in regional airports across South Korea from 2020 onwards. KAC is responsible for awarding the concessions.

In line with government policy on airport duty free arrival shops, bidding for Gimpo’s mixed category arrivals shop license would be restricted to SME companies.

Should the tender be approved, KAC expects it to generate strong interest among SME operators and other enterprises keen to enter the duty free industry.

TENDER PREPARATIONS

Seeking approval for the Gimpo shop tender recently accelerated following signs the government might decide to roll-out arrivals shops faster than first planned. This was prompted by the introduction of airport arrivals shopping in Japan over the past 18 months.

“The government suggested that it might be possible for KAC to launch arrivals duty free shopping six months after Incheon International Airport began operating its arrivals shops,” Kim Su Min, Korea Airports Corporation’s Commercial Facilities Team Assistant Manager, tells TRBusiness.

“We are, therefore, seeking approval for a single 200sq m arrivals shop.”

The full-length interview with Kim Su Min will appear in the May issue of TRBusiness. Subscribe to the magazine here.

She added: “Hopefully we could have an arrival shop in Gimpo as early as the end of this year. KAC is preparing to make a plan how to issue a tender for arrivals shops, but we don’t have any specific bidding timeline.”

The bidding process is expected to follow a similar procedure as the one used for Incheon International Airport’s two recently awarded duty free arrival shop concessions.

Operators would submit their bids to KAC which would then shortlist two companies. The pre-qualified bids would then be assessed by Korea Customs Service (KCS), which would make the final decision — as it did with the Incheon Airport shops in March.

“Gimpo Airport’s arrival shop would sell all items except for tobacco and fresh food,” Kim clarifies. “We think liquor will be popular; also perfume and cosmetics.”

Although the total number of passengers served by Gimpo Airport rose just 2% in 2018 to 24.6m, international pax grew by a more encouraging 6.4% to 4.3m.

South Korean travellers accounted for 45% of all international passengers using Gimpo Airport in 2018, while Chinese visitors represented 30%. Japanese travellers made up the difference of 20%.

Overall, international passengers spent about $90m in Gimpo Airport’s departure duty free shops in 2018, according to Kim.

Perfumes and cosmetics accounted for around 45% of sales. Tobacco comprised 15%, foodstuffs 8%, ginseng products 6%, leather bags 5% and liquor just 5%.

The full-length interview with Kim Su Min will appear in the May issue of TRBusiness. Subscribe to the magazine here.