Battle to win new lucrative duty-free licenses kicks off

By Park Sae-jin Posted : October 4, 2016, 15:56 Updated : October 4, 2016, 15:56

A Lotte duty-free store is packed with Chinese shoppers. [<저작권자 ⓒ 1980-2016 ㈜연합뉴스. 무단 전재 재배포 금지.>]


Lotte Duty Free launched a special 123-floor event Tuesday at its new landmark supertall skyscraper to restore its fame as South Korea's largest operator of duty-free stores, as a battle to win lucrative duty-free operating licenses kicked off.

South Korea has nine duty-free shops in operation and plans to open six more -- four in Seoul and one each in the southern port city of Busan and Gangwon province.

Lotte was among five big companies which submitted their bids for licenses at stake in Seoul. The other four included SK Networks, HDC Shilla Duty Free, Shinsegae Duty Free, and Hyundai Department Store.

Lotte is more desperate than other competitors because it managed to maintain its flagship store license in central Seoul but lost its Lotte World Tower license to Doosan Group in a government assessment last year. The tower is a 123-floor, 555-meter skyscraper in southern Seoul.

After its chairman, Shin Dong-bin, avoided arrest last week, the country's fifth-largest conglomerate vowed to step up efforts to normalize troubled businesses and projects which have been put on hold due to an investigation by prosecutors into tax evasion, embezzlement and other irregularities by executives.

Buoyed by the successful opening of Starfield Hanam, South Korea's largest shopping complex, last month, the duty-free arm of Shinsegae Group has selected Central City, a mall complex in Gangnam, to build a new duty-free store.

In Gangnam, Seoul's most affluent district, HDC Shilla Duty Free is ready to host a second duty-free store. Hotel Shilla, which has South Korea's second-largest duty-free chain after Lotte, is controlled by Lee Boo-jin, the eldest daughter of Samsung's ailing patriarch Lee Kun-hee.

Duty-free licenses have been coveted by major business groups including SK Group which lost its Seoul license to Shinsegae.

SK Networks hopes to host the duty-free store again in W Seoul-walkerhill Hotel in eastern Seoul that will be reborn as an integrated resort. CEO Moon Jong-Hoon said the new resort would be better than Singapore's Marina Bay Sands.

Of four licenses at stake in Seoul, three will be allocated to big companies and one to a smaller company. The winners will be decided in December.

Helped by big-spending Chinese tourists, sales of South Korean duty-free stores surged from 5.3 trillion won (5.2 billion US dollars) in 2011 to 9.19 trillion won in 2015. Despite concerns about oversupply, the Korea Customs Service has predicted that duty-free shops could attract 6.93 million clients in 2017.

Aju News Lim Chang-won = cwlim34@ajunews.com
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