Retail in Asia

In Markets

Korean authorities to grant four new downtown duty free licences

Korea Customs Service is to offer four more downtown duty free licences amid burgeoning business with Chinese tourists. The licences will be granted in the capital Seoul, the second city of Busan and north eastern province Gangwondo.

Three will be open to all companies and one reserved for small & medium enterprises (SMEs). Business plans and other official documentation must be submitted by 4 October. The fate of the licences will then be decided within two months.

Informed local observers believe there is a strong chance that Lotte Duty Free will be able to reclaim its licence for Lotte World Tower. That business (or the duty free component of it) is due to close at the end of this month following the controversial late-2015 tender, when Lotte lost out to Doosan Group. Similarly, SK Networks could be able to reopen its WalkerHill Duty Free operation, shut down in May after the retailer lost out to Shinsegae last year.

A leading Korean duty free executive told The Moodie Davitt Report: “Some retail giants such as the Hyundai Department Store Group and Eland Group will likely compete and some predict that Shinsegae, Doosan, Hanwha and Shilla (or HDCShilla) might jump into the race.” He said the chances of a comeback for Lotte Duty Free and WalkerHill Duty Free were considered strong.

In South Korea’s second city of Busan, Busan Tourism Organization is set to apply for the licence as part of a consortium, the source said.

In Gangwondo, provincial state-run Gangwondo Development Corporation is set to apply with Alpencia Resort, catering to tourists visiting the region for its magnificent skiing facilities and natural beauty.