Shinsegae injects KW75 billion (US$69 million) into duty free operations

SOUTH KOREA. Shinsegae has underlined the seriousness of its travel retail ambitions by announcing a KW75 billion (US$69 million) investment in its burgeoning duty free business in 2018.

“Shinsegae will inject 75 billion won into its new duty free outlets that are set to open next year,” a spokesperson told The Moodie Davitt Report. “One is Incheon Airport Terminal 2 – opening in January 2018 – and the other is in Seoul’s Gangnam area.”

Gangnam style

The Gangnam store is the result of Shinsegae having won an additional duty free licence in December 2016. The retailer opened its first downtown duty free store in Seoul, in the busy Myeong-dong area, in May 2016. The Gangnam shop’s opening has been delayed by the slump in Chinese tourism to South Korea this year caused by the dispute over the latter’s deployment of US anti-missile system THAAD. The row appears to have been resolved following recent conciliatory statements by both governments, paving the way for what all Korean travel retailers hope will be a resurgent 2018.

Shinsegae is banking on a rapid return of Chinese tourists to Seoul now that the THAAD dispute is apparently resolved

After it won the second Seoul licence, Shinsegae outlined ambitious plans for the new 13,350sq m store in Central City in the Seoch-gu area of Gangnam. Central City is South Korea’s largest multi-cultural leisure and entertainment space, featuring the Shinsegae Department Store, a hotel, restaurants, cinema and book stores. Collectively they offer what the retailer called a “seamless, one-stop shopping experience”.

Shinsegae Duty Free’s first Seoul downtown shop is housed in one of the city’s most revered landmarks, Shinsegae Department Store

Shinsegae Duty Free CEO Young-mok Sung said at the time: “With the opening of the Central City outlet, Shinsegae Duty Free will be able to provide foreign tourists with unique experiences and contents, including gourmet, shopping, culture and lifestyle offers through various tourism programs and infrastructure.”

He pledged that Shinsegae Duty Free will promote and develop Korean tourism through free independent travellers (FITs) and strive to “catch the hearts” of foreign tourists.

Shinsegae Duty Free said it will foster tourism in the southern Seoul area by integrating the company’s general retail and duty free operations. The retailer said that it selected Central City for the new store in order to champion local tourism, diversify the travel offer and attract more FIT visitors.

Shinsegae Duty Free promises to “catch the hearts” of tourists at Central City, described as South Korea’s largest multi-cultural leisure and entertainment space

In October, as reported, Shinsegae Group established a new entity called Shinsegae Duty Free Global, after splitting its duty free businesses in Busan (downtown) and Incheon International Airport from parent company Shinsegae Chosun Hotel. The new entity embraces all the group’s duty free operations, including the two Seoul downtown stores.

Back in fashion at Incheon

Shinsegae Duty Free was awarded the fashion & accessories contract at Incheon International Airport Terminal 2, which opens on 18 January, 2018.

The concession covers 14 stores, embracing 4,889sq m of retail space. Shinsegae’s victory came at the end of a tortuous tender process, which saw the concession rebid several times, on each occasion with a sharply reduced minimum guarantee in an effort to attract interest.

Given the apparent resolution of the THAAD spat, Shinsegae Duty Free may have got its bidding strategy and timing just right.

On 18 January, 2018, Shinsegae will extend its Incheon International Airport operations from T1 (pictured) to the new T2
Food & Beverage The Magazine eZine