In Markets

Rebidding for remaining new Incheon airport duty-free shops fails again

South Korea duty free new incheon aiport terminal - Retail in Asia

An attempt to lease out the remaining duty-free store licenses by tender at the new terminal at Incheon International Airport has failed again, as no duty-free operators made a bid.

The auction for licensing to run the apparel and accessories store at the second terminal (T2) at the hub airport that is expected to open later in the year has been put off for a second time due to a lack of tenders, according to Incheon International Airport Corp. (IIAC) and duty-free operators.

Late last month, the IIAC and Korea Customs Service picked Lotte Duty Free and Shilla Duty Free as the respective winners of the liquor and cigarettes and the fragrance and cosmetics sections, which will start operations in October in line with the scheduled opening of T2.

Due to an amendment in the licensing process, duty-free operators in South Korea need approval from both the airport and customs authorities to run an airport duty-free store through public bidding, which is subject to renewal every five years.

SEE ALSO: THAAD row with China affects Incheon duty-free bid

While the bidding of the two popular areas prompted big duty-free operators to scramble to win a slot, the fashion and accessories section drew no interest as it was apparently considered less profitable given the high lease fees.

Local duty-free companies are expected to suffer a blow from a steep decline in Chinese tourists who have made up the bulk of their sales after China banned its local travel agencies from selling Korea-bound trips from mid-March.

Beijing has taken hostile actions against South Korean companies and their goods in retaliation for Seoul‘s deployment of a U.S. anti-missile system, known as THAAD, which it deems a threat to its own security.

Shinsegae DF and Hanwha Galleria, two other contenders who lost in the first bidding for the two spots, were expected to take part in the new tender, but did not make an offer.

The IIAC said it is looking into putting up another bidding notice for the thwarted section within the week.

Follow Retail in Asia on Facebook, Twitter and LinkedIn.

Get our top stories delivered to your inbox: