SOUTH KOREA. Incheon International Airport generated duty free sales of US$1.989 billion in 2014 – a world-record performance in the 67-year history of the airport duty free industry – The Moodie Report can reveal. The number is just ahead of Duba..

Incheon International Airport hits all-time

world record duty free sales high in 2014

 

Incheon International Airport hits all.docx

(Photo Image from :Mood Report) 

KOREA. Incheon International Airport generated duty free sales of US$1.989 billion in 2014 – a world-record performance in the 67-year history of the airport duty free industry – The Moodie Report can reveal. 

The number is just ahead of Dubai Duty Free's own record 2014 sales of US$1.917 billion, a result first revealed by us yesterday. 

Incheon sales outstripped international passenger traffic growth of +10.1% (to 44.9 million) in 2014. 

The record turnover was driven by surging numbers of Chinese visitors to South Korea – up +40.9% in the first 11 months to 5,706,364 (a 43.5% share of arrivals) – and a strong increase in outbound Korean nationals (ahead +7.4% to 14,650,007 for the same period). 

Accumulative figures of selected arrivals to South Korea by gender for the eleven months to November 2014; Source: Korea Tourism Organization

About 47% of Incheon duty free sales were to Korean travellers (47%) with the Chinese and Japanese collectively generating a further 39% (of which the Chinese were by far the dominant group), Incheon International Airport Corporation (IIAC) Director Concession Team 1 Sang-Joon Ahn told The Moodie Report. 

Ahn said that cosmetics & perfumes (collectively) ranked as the leading category, accounting for 38% of overall sales, followed by leathergoods (18%), liquor & tobacco (16%), and fashion & accessories (14%). 

Against the critical backdrop of a prolonged surge in Chinese visitors and travel retail spending in 2014, local and international retailers are competing across two broad packages of duty free tenders for core categories within Incheon International Airport's overarching Airstar shopping complex

The performance is all the more impressive given the soft Japanese market, for so long the linchpin of South Korean travel retail. Driven by a weak Yen, which drove a -16.7% fall in visitors to South Korea in the first 11 months of 2014, spending by Japanese tourists (16.1% of total arrivals in the same period) on travel retail was very soft last year. 

The numbers are of critical interest as local and international retailers hone their offers for the Incheon International Airport duty free tender, which closes on 30 January. As previously reported, the prolonged Chinese surge shows no sign of slowing and the skew of the market away from the Japanese and in favour of the Chinese will be a key factor in every bidder’s proposal. 

While the impact of Chinese spending has traditionally been greatest at South Korea’s downtown shops, Incheon International Airport is also clearly benefitting as the 2014 results show. 

As revealed by The Moodie Report, on 17 December the airport passed the landmark of KRW2,000,000,000,000 (US$1.9 billion) in annual duty free sales for the first time since it opened in 2001. The last two weeks of the year were clearly the icing on a very rich commercial cake. 

The main incumbents, Shilla (above) and Lotte (below), face stiff competition for the bigger outlets as well as being barred from contesting some of the secondary spaces in the Incheon International Airport duty free tender, which closes on 30 January

Departures by Koreans for the first eleven months of 2014 by gender (above) and by age (below)

Selected arrivals to South Korea by gender in November 2014; Source: Korea Tourism Organization

Accumulative figures of selected arrivals to South Korea by purpose and nationality for the eleven months to November 2014; Source: Korea Tourism Organization

 

From: The Moodie Report on 05 January 2015