Incheon International Airport’s new Airstar brand integrates the various category offers under a single umbrella

SOUTH KOREA. Duty free retail sales at Incheon International Airport are projected to climb from US$1.17 billion last year to US$3 billion by 2015. And Incheon International Airport Corporation believes the airport will become the world’s biggest duty free sales location this year, following the opening of the new Concourse in June and the revamping of the existing stores in the existing Passenger Terminal Building by May.

Speaking at the World’s Best Airports Forum in Incheon yesterday, IIAC Deputy Executive Director, Operations Division Kwang-Soo Lee unveiled the airport’s new retail branding – themed “˜Airstar’. The brand is designed to lend more excitement, luxury and accessibility to the shopping experience at Incheon.

Though already in use (see pictures below), it will be formally introduced at the Grand Opening of the new concourse. IIAC created an overall commercial concept, tagged “˜Star & Starlife’, based on extensive analysis of consumers using Incheon. That concept is being driven by four different themes: “˜luxury’, “˜world best’, “˜fun & exciting’, and “˜best price’. [To hear the latest episode of The Moodie Podcast, ‘Airstar arrives at Incheon’, click here.]

The main AK Duty Free fragrances & cosmetics store at Incheon’s Passenger Terminal Building is brilliantly located immediately beyond the central security point and immigration. It is currently generating daily sales of US$600,000

In his presentation Lee promised a range of cutting edge new shops that will transform the Incheon experience under the Star & Starlife concept and Airstar brand. “Airstar will offer brand-new experiences no one has ever imagined,” he told delegates, during a retail-focused panel discussion moderated by The Moodie Report.

“We are aiming to become the number one retail airport worldwide in connection with the second phase Grand Opening,” he said.

A star is born – or in this case an Airstar. The IIAC’s renewed consumer focus is underlined by the new retail brand

The results of the new stores and the retail makeover in the Passenger Terminal Building will be as dramatic as those experienced since the ambitious recent overhaul of Incheon’s food & beverage offer in the main terminal, Lee said.

Kwang-Soo Lee (left) delivered his presentation during a highly stimulating panel discussion chaired by The Moodie Report. He is pictured with Stephen Walsh, Director, Airport Retail Consultants; IIAC President and CEO Jae-Hee Lee; Sunil Tuli, Managing Director, King Power Travel Retail and Duty Free; and Bill Matz, President, The S-A-P Group.
(Right) The Forum was held at the Hyatt Incheon Regency, adjacent to Incheon International Airport (pictured)

He produced figures showing the impact of strengthened brands, interior upgrading and a change of menu, with new F&B outlets posting year-on-year growth of +101%, +117% and +140%.

Lee noted: “Over the last two years we have done a lot to maximise our commercial sales.”

The numbers tell the story of Incheon’s dramatic emergence as a major airport retail force since it opened in 2001

After the Forum concluded today, delegates were given a tour of Incheon International Airport, including the new concourse and runway. Since the new duty free concessions started on 1 March a number of temporary shops have been operating in the Passenger Terminal Building. These will all be replaced by May.

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One outlet that has opened though is the new cosmetics & fragrances store run by AK Duty Free – formerly a liquor & tobacco (now Lotte Duty Free) and general merchandise concessionaire at Incheon. Its attractive main store is already doing roaring business. “The average sales volume is about US$600,000 a day,” an IIAC spokesman told delegates during the tour, “so it is the number one cosmetics store in the [duty free] world.”

That honour traditionally belonged to the main Lotte store at Incheon. The biggest fragrances & cosmetics space though at Incheon has been given to The Shilla Duty Free, which will open its main locations fully in coming weeks. Lotte Duty Free posted sales of US$103 million in the first quarter at Incheon, up by +5% year-on-year, despite the disruption caused by the concession change. Last year it generated sales of US$413 million there, from its cosmetics & fragrances and general merchandise businesses combined. Already the success of its liquor & tobacco business at Incheon is evidence that it can transfer its acknowledged expertise in perfumes, cosmetics, fashion, accessories and luxury to other categories.

New (and exclusive) liquor & tobacco concessionaire Lotte Duty Free is running a mix of permanent and temporary shops with more to open in May and June across the Passenger Terminal Building and the new Concourse. As the picture reveals, footfall rates into the main store are very high. So is penetration.

The Shilla Duty Free, South Korea’s second-biggest downtown duty free retailer, has made its long-awaited debut at Incheon International Airport with a range of fashion and accessories, and perfumes & cosmetics stores

The Shilla Duty Free unexpectedly won the major perfumes & cosmetics concession at Incheon International Airport in the 2007 tender – its main stores are close to completion for opening in May and June

State-owned Korea Tourism Organization, trading as Duty Free Korea, is selling a range of foodstuffs, gifts and destination merchandise. The shops may be temporary and basic but the business levels are amazing

NOTE: The World’s Best Airports Forum will be featured in a report on the South Korean duty free market in next month’s issue of The Moodie Report Digital Print Edition. It also includes interviews with Paradise Duty Free, Korean Air, Lotte Duty Free and dynamic independent duty free agent Brandepot Co.

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Lotte to open luxury Incheon boutiques today as first quarter business booms – 23/04/08

World’s Best Airports Forum begins in Incheon – ‘Only pioneers can catch the dream’ – 24/04/08

Incheon International Airport gets ready for major handover of duty free retailers – 29/02/08

Incheon tops ACI Airport Service Quality survey amid clean sweep by Asian airports – 25/02/08