SM Duty Free is one of two arrivals duty free operators at Incheon Airport.

A proposed revision to Korean customs law that could pave the way for the introduction of online duty free pick-up counters at the arrivals hall of Incheon International Airport has stoked fears of an erosion in shop sales.

A report from Korean title The Bell, corroborated by TRBusiness’ sources in Korea, suggests the National Assembly is considering an amendment bill to facilitate greater convenience in the duty free shopping process for Koreans, while dampening their tendencies to purchase abroad.

CONGLOMERATES MAY BENEFIT

Should the revised bill pass into law, the likes of Lotte Duty Free – its online sales now account for approximately 25% of the total business with that share continuing to grow – alongside The Shilla Duty Free and Shinsegae Duty Free could witness a sharp rise in domestic sales.

The Government permitted the first arrivals duty free shops in Korea at Incheon Airport last year, with SM Duty Free and Entas Duty Free opening units at Terminal’s 1 and 2, respectively.

“With the pick-up desks at arrival halls, domestic travellers no longer have to carry their purchased items during traveling,” explained a Korean duty free source.

“Some worry that the opening of arrival pick-up desks will affect arrival duty free shops. However, others disagree because online duty free stores cannot sell liquor. Liquor is arrival duty free shops’ main profitable merchandise.”

A source involved in arrivals duty free anticipated an impact on the business, but noted: “Liquor (the largest category) will not be effected and addition of tobacco will offset the damage.”

The Korean government has been contemplating ways of improving the arrivals duty free experience for passengers, including the possible introduction of tobacco sales.