Lotte Duty Free and City Duty Free have entered into an agreement to jointly grow their businesses by opening small- and medium-sized duty free shops in markets ripe for development.
The companies will work together to operate duty free shops and secure a leading portfolio of brands while leveraging product transfer support and joint marketing activities to attract customers as travel continues to rebound.
The Korean retailer has described the partnership, established on 16 February, as a ‘win-win’ cooperation that will deliver growth for both companies.
“Win-win development of small and medium-sized duty free shops is the way for Korea’s duty free industry to grow together,” said Ju Nam Kim, CEO, Lotte Duty Free.
To celebrate the new partnership, a ceremony was held with City Plus, the operator of City Duty Free, at the Lotte Duty Free headquarters in Jung-gu, Seoul, attended by the CEOs of both entities.
City Duty Free currently manages two duty free concessions in Korea: at Incheon Airport Terminal 2 and Muan International Airport.
Lotte Duty Free will draw upon its expertise to support the development of small- and medium-sized duty free stores and will advise on product supply and attracting brands.
It’s hoped the partnership will help to increase ‘bargaining power’ with major brands, and aid the transfer of goods by sharing know-how on warehousing, inspection and inventory management.
Joint marketing activities will also help to boost employee service training.
“Co-existence with small and medium-sized duty free stores is the way for the Korean duty free industry to grow together,” said Ju Nam Kim.
“As the duty free industry has gone through a difficult time due to the prolonged covid-19, Lotte Duty Free will spare no effort to provide various support to overcome the crisis and develop together with small and medium-sized duty-free stores.”
Lotte Duty Free has previously signed similar business agreements with companies, such as Jungwon Duty Free, to enhance the capabilities of small- and medium-sized duty free stores.
The retailer has earmarked KRW 50 billion (approximately US38 million) for its ‘win-win’ cooperation fund to support low-interest financing for partner companies and to support domestic small- and medium-sized companies to expand into new territory through Lotte Duty Free’s 13 overseas branches.
In recognition of the initiativen, Lotte Duty Free received the ‘WE(Win-win Excellent) Duty Free Shop’ certification awarded by Seoul Customs for two consecutive years, in 2021 and 2022
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