From Aggression to Caution, South Korea’s Duty-Free Giants refine Seoul Incheon Airport Bids

A clear divergence is emerging among South Korea’s major duty-free operators as the rebidding process for Incheon International Airport’s core concessions approaches. While all players face the same tender conditions, their strategies reflect sharply different risk appetites shaped by recent losses and a tougher market outlook.

Lotte Duty Free has taken the most proactive stance. After failing to secure concessions in the 2023 tender, the market leader has formed a dedicated task force of around 20 staff, spanning finance, merchandising, sales, and marketing. Leveraging its dominant market share, strong global brand negotiation power, and proven marketing capabilities, Lotte is positioning itself to score highly under the new evaluation framework, where qualitative criteria account for 60 percent of the total score.

Hyundai Duty Free, by contrast, is adopting a cautious, wait-and-see approach. Having recently returned to profitability, the company is carefully reviewing the financial and structural conditions of the bid rather than pushing aggressively. Hyundai’s strengths lie in financial stability and its ability to link department store merchandising expertise and VIP customers to its duty-free business. However, weaker brand power and a limited global network may put it at a disadvantage in qualitative evaluations.

Shilla Duty Free and Shinsegae Duty Free are the most restrained. Both withdrew from Incheon Airport after the previous tender, absorbing penalties of roughly KRW 1.9 trillion following heavy losses caused by aggressive bidding. This history has forced both operators to re-examine profitability first, while also factoring in potential penalties in qualitative scoring due to their prior exit.

Industry sentiment suggests the rebid will not trigger another high-priced bidding war. With the won-dollar exchange rate hovering near KRW 1,500, shifting consumer behavior, and a slow recovery in travel retail, operators are expected to bid close to the minimum acceptable rent. As a result, analysts see a razor-thin contest that may ultimately underscore the structural limits of profitability in the duty-free sector, rather than a simple fight for market share.