Doosan, Lotte, Shinsegae and SK Networks Battle Over Operational Licenses For 4 Duty Free Stores In South Korea As They Submit Their Bids To The Korea Customs Service
Four retailers, including Doosan, Lotte, Shinsegae and SK Networks, vied for duty free operational licenses as four South Korea duty free shops' licenses - three in Seoul, one in Busan - are set to expire this year, reported Korea JoongAng Daily on Saturday.
Of the expiring licenses, Lotte Duty Free holds two of it - one for Sogong-dong, central Seoul and the other for Jamsil, southern Seoul. SK Networks runs the duty free shop in Gwangjin District, while Shinsegae runs the shop in Paradise Hotel at Busan.
According to Korea Observer on Friday, the four conglomerates have already submitted their bids to the Korea Customs Service (KCS) and are expecting the decision by November.
Doosan Group has never run a duty free shop before, but proposes its Doosan Tower mall in Dongdaemun as a possible venue, with the high foot traffic of tourists in the district.
Lotte, on the other hand, plans to retain their shops in Seoul, which, together, earns approximately $2.18 billion.
Shinsegae proposed to relocate and expand its Paradise Duty Free Shop in Busan to the Shinsegae Centrum City, while SK plans to retain its duty free store in Sheraton Grand Walker Hill Hotel.
Big firms are highly interested on venturing into the duty free business as the industry has seen a double-digit sales growth from the increasing number of tourists in South Korea.
Shinsegae has reportedly earned $277 million from selling a large portion of their shares in Samsung Life Insurance in May, which the company may use to invest on the duty free business.
Lotte has been running its duty free business for 35 years, but is now facing an obstacle with the new law that is requiring existing license holders to compete with other parties to renew their licenses.
"Unlike an earlier competition for new licenses, having a competitive edge over the existing operators will be a critical factor to win the bid," said analyst at NH Investment & Securities Kim Dong Yang.
