Incheon Airport Duty Free Tender Reopens Race for Prime Terminal 1 and 2 Retail Space

Incheon International Airport Corporation (IIAC) in South Korea has formally launched a major tender for new duty-free concessions at Terminals 1 and 2, marking one of the most closely watched airport retail opportunities in North Asia in recent years. The tender covers large-scale cosmetics and perfume, as well as liquor and tobacco operations, and is widely seen as a key indicator of how Incheon Airport intends to recalibrate its duty-free strategy in the post-pandemic period.

According to the tender notice, the new concessions are divided into two packages, DF1-2025 and DF2-2025, encompassing core departure-hall locations in both terminals. Combined, the two packages account for approximately 8,665 square metres of retail space. Under the existing DF1 structure, cosmetics and perfume areas total 5,031 square metres in Terminal 1 and 4,094 square metres in Terminal 2. The newly reorganised DF2 package adjusts the allocation between cosmetics, perfume, liquor and tobacco, while maintaining a similar overall scale of 4,994 square metres in Terminal 1 and 4,571 square metres in Terminal 2. This structure confirms that Incheon International Airport Corporation intends to preserve one of the world’s largest duty-free footprints for beauty and liquor, despite operational adjustments following COVID-19.

The concession period will run until 30 June 2033, providing a contract term of roughly seven years from the start of operations. At the request of the successful bidder, the contract may be extended for up to ten years in accordance with relevant regulations. The long-term horizon is expected to appeal to global duty-free operators planning significant capital expenditure in store design, brand zoning and digital infrastructure.

Tender documents specify that sales performance for evaluation purposes will be measured over the period from 1 November 2024 to 31 October 2025. A benchmark figure of KRW 36.63 trillion, excluding value-added tax, is cited as a reference for qualification and fee-calculation criteria, alongside a separate reference amount of KRW 3.05 trillion applied to another performance component. This suggests a differentiated weighting system across product categories or terminal locations within the evaluation model.

Participation requirements are stringent. Incheon International Airport Corporation requires bidders to demonstrate strong financial credentials, proven operating experience and detailed business plans. Parts of the qualification process reference Korea Airports Corporation systems, including the CFMS platform. Applications and supporting documents must be submitted through the designated portal, followed by an electronic auction on onbid.co.kr scheduled for 20 January 2026, from 14:00 to 16:30 KST. Presentations and evaluations will take place on the same day at the airport’s conference facilities. The tender rules prohibit submission by fax and require all proposals to be accompanied by USB-based presentation materials, underscoring the procedural formality of the process.

A central issue in the tender is the adjustment of rental conditions. The current process follows the return of existing concessions by Shilla Duty Free and Shinsegae Duty Free, both of which cited the burden of rental costs as a key factor in relinquishing their business rights. In response, Incheon International Airport Corporation has revised rental levels for core areas.

For the DF1 zone, comprising 15 stores with a total area of 4,094 square metres, the unit rental rate has been reduced from KRW 5,346 to KRW 5,031 per square metre, including VAT, a decrease of 5.9 per cent. For the DF2 zone, covering 14 stores and 4,571 square metres, the rate has been lowered from KRW 5,617 to KRW 4,994, representing an 11.1 per cent reduction.

From a revenue perspective, the bidding structure continues Incheon International Airport Corporation’s established model combining a fixed minimum guarantee with a percentage of sales, calculated on 100 per cent of VAT-excluded revenue. The evaluation framework allocates points across business capability, financial soundness, operational experience, customer service and store design innovation. The tender also allows DF1-2025 and DF2-2025 to be awarded to different operators, a structure designed to encourage competition on both pricing and service quality.

For global and domestic duty-free players targeting the recovering Northeast Asian travel corridor, the scale, duration and visibility of these concessions mean the upcoming auction is likely to become a decisive battleground in shaping the airport retail landscape at Incheon from 2026 through 2033.