SEOUL, December 12 (AJP) - China Duty-Free Group (CDFG), the world’s largest duty-free operator, is emerging as a major contender in the re-bidding of duty-free concessions at Incheon International Airport, setting the stage for heightened competition with South Korean rivals Lotte, Hyundai, Shilla and Shinsegae.
A Dec. 18 bidder briefing is expected to confirm participation.
Incheon Airport Corporation on Thursday reopened the tender for operators of the DF1 zone — covering perfume and cosmetics — and the DF2 zone, which includes liquor, tobacco, perfume and cosmetics. The licenses were returned by Shilla Duty Free and Shinsegae Duty Free, which won them in 2023 but later withdrew after incurring heavy losses. Their request for a 40 percent rent reduction was rejected by the airport, leaving each with penalties of around 190 billion won.
Shilla will continue operations until March 16 and Shinsegae until April 27, after which new operators will take over. Contracts will run through June 30, 2033, with an option for up to 10 years of renewal.
Lotte Duty Free and Hyundai Department Store have formed internal task forces to prepare bids, while Shilla and Shinsegae are cautiously reviewing the commercial terms before deciding whether to re-enter the competition.
But industry attention is increasingly fixed on CDFG, whose participation in the previous tender round pushed bid prices sharply higher. The Chinese state-owned operator posted a net profit of 3 billion yuan (about 622 billion won) in the first three quarters of this year, reinforcing expectations it could submit an aggressive offer.
Despite rising inbound travel, duty-free operators are navigating shifts in consumer behavior as foreign tourists increasingly shop at domestic retail chains such as Olive Young and Daiso. Analyst Yoo Jung-hyun noted that “shopping preferences are moving away from airport duty-free stores toward local specialty retailers.”
Bids are due on Jan. 20, with clarity on the final field expected at the Dec. 18 briefing. An industry insider warned that overly aggressive bids could trigger a “winner’s curse,” urging companies to calculate break-even points carefully before committing.
* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
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