As Incheon International Airport Corporation (IIAC) moves to relaunch bidding for the duty-free business licenses returned by Shilla and Shinsegae Duty Free, four domestic players (Shinsegae, Lotte, Shilla, Hyundai) are engaged in a game of wait-and-see. With Lotte Duty Free, which has no duty-free shops at Incheon Airport, almost certain to participate, the other companies are also leaving the door open.
According to industry sources on the 18th, Incheon Airport will hold a business briefing this morning on the bidding for the DF1 and DF2 (cosmetics, perfume, liquor, tobacco) duty-free zones. A site tour is also scheduled after the briefing. It comes a week after the bidding notice was posted on the 11th. Bid proposals are due on Jan. 20 next year.
All four domestic companies completed applications to attend the briefing on the 16th. Although attending the briefing does not necessarily lead to participation in the bidding, it helps gauge the mood of the corporation and competitors, suggesting all four are considering bidding.
A duty-free industry official said, "Because this is a rebid, it will be mostly Q&A," adding, "It's about making an impression on the corporation and gauging competitor participation." The official also said, "The briefing is not a prerequisite for bidding, but if there is intent, most will attend."
Lotte Duty Free is the operator almost certain to take part in the bidding scheduled for next month. Lotte, edged out by Shilla, Shinsegae, and Hyundai in the 2023 bidding, has been eyeing a return to the airport. While its lower price at the time was an issue, some analysts say its past record of returning a license also weighed it down.
There is also speculation that Shilla or Shinsegae, which returned their licenses this time and paid penalties, could rebid when factoring in price. While the rent-per-passenger system remains, the base bid price (minimum acceptable rent per passenger) for the DF1 and DF2 zones is down 5.9% and 11.1%, respectively, from the 2023 bidding.
However, there is a view that, as with Lotte in the past, the record of withdrawal could count against them in the business capability evaluation rather than price, prompting a more cautious approach. Some also expect they will not bid aggressively out of sync with mid- to long-term duty-free market conditions or internal business restructuring.
Hyundai Duty Free is also seen as a potential bidder for expansion, as DF5 (luxury boutiques), which it operates at Incheon Airport, generates stable revenue. Beyond domestic operators, there is talk that overseas players from China Duty Free Group (CDFG), Thailand, and France could also make a run.