SM and Entas take first DF arrivals contracts at Incheon

By Luke Barras-hill |

Incheon-Airport-leadThe Korea Customs Service (KCS) has announced SM Duty Free and Entas Duty Free will open the first duty free arrivals shops at Incheon International Airport.

Entas Duty Free and SM Duty Free had been shortlisted to operate the shops at Terminal 1 (AF1) and Terminal 2 (AF2).

SM Duty Free will unveil two shops covering 380sq m at the eastern and western zones of Terminal 1, with Entas Duty Free occupying a 326sq m single unit at Terminal 2 at the centre of the port of entry.

David-Yu-CEO-Entas-Duty-Free-lead

David Yu, CEO, Entas Duty Free.

END OF MAY START

Both concessions, which run for five years, go live on 31 May following a preparation period of two months.

The KCS will ‘actively support’ the enterprises in anticipation of the openings.

The KCS announced the results of the patent evaluation committee today (29 March) at a media briefing at the airport.

Undertaking the patent examination were two independent committees, each of whom named a terminal operator.

Under the component assessed by IIAC under the divisive two-tier assessment model, Entas Duty Free scored 234.5 points out of 250 for the AF1 concession, higher than SM Duty Free’s 209.03 mark.

However, SM Duty Free snared the concession with a total score of 841.36 out of 1,000 versus Entas Duty Free’s 832.83. TRBusiness is seeking further detail on the reasons behind this decision.

As reported, the tender was open to small and medium-sized enterprises only.

Entas_T1

Entas Duty Free already runs an SME shop in Incheon International Airport T1.

IIAC shortlisted candidates for each of the two arrival shop concessions on 19 March [the closing deadline for bids was 13 March – Ed] before financial proposals were evaluated by the Korea Customs Service the following day.

Earlier this month, TRBusiness revealed a total of 14 bids were lodged for the two concessions following a decision last year to permit arrivals duty free shops at the port of entry.

CONSENSUS ‘FAVOURS OPENINGS’

City Duty Free, Daewoo Development, Grand Duty Free, Kunsan Seaport and Dufry Thomas Julie Korea were other likely contenders, although TRBusiness is seeking confirmation on the pre-shortlist bidders.

Incheon International Airport Corporation expects first year sales from the new concessions to reach at least KRW100bn ($85m).

The new shops will offer all product categories except for tobacco and fresh food products under a $600 allowance ceiling.

This is designed to reduce the ‘discomfort’ experienced by tourists travelling with duty free goods, while boosting domestic consumption.

SM_downtown

SM Duty Free downtown store in Seoul.

Citing a survey conducted by the Korea Development Institute, KCS says 81.2% of people favoured arrivals duty free stores at Incheon International Airport.

It adds that foreign tourist numbers in Korea have jumped by 7.1% annually in the past 10 years.

A total of 582 jobs are expected to be created directly or indirectly as a result of the arrivals store openings, according to the Korea Transport Research Institute.

TRBusiness aims to bring you further reaction to the news in due course…

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