By Park Jae-hyuk
Hotel Shilla has secured a license to operate a duty free store at Hong Kong International Airport, Samsung Group's hotel giant said Thursday.
It won a bid competing with Hotel Lotte, another Korean hotel chain giant.
Shilla has become the first Korean hotel to operate duty free stores selling cosmetics at Asia's top three airport hubs in Incheon, Singapore and Hong Kong.
According to the Airport Authority Hong Kong, the operator of Shilla Duty Free won a license for a fragrance, cosmetics and fashion accessories zone which will open November, while China Duty Free Group gained one for a liquor and tobacco section.
Their licenses will expire in September 2024.
As well as the two Korean retail giants, global companies such as Switzerland-based Dufry and Hong Kong-based King Power Group had their eyes on the fragrance and cosmetics section.
"Hotel Shilla's achievement means an upheaval in the global duty free market which has long been dominated by operators in developed countries," Mirae Asset Daewoo analyst Hahm Seung-hee said in a report.
"Retailers in developed countries had an absolute advantage in the past when it came to sourcing major luxury cosmetics brands, but these days each firm's competence has become more important than quality of goods, due to developments in Asia's tourism businesses and changes in consumer demand."
Hotel Shilla expects to post more than 1 trillion won ($883 million) in overseas sales next year. The company posted 500 billion won in overseas sales last year ― the largest overseas sales among Korean duty free operators.
Lotte, the top local duty free operator, was defeated again after it lost to DFS Group in a bid for a Hong Kong International Airport duty free store in 2011.
Some industry officials suspected Lotte's offering of land for a U.S. anti-missile defense system had negatively influenced the final result. Korea's fifth-largest conglomerate has suffered economic retaliations from the Chinese government over the issue.
A Hotel Lotte official declined to mention the issue, but said the company will continue to expand its presence overseas.
"A Lotte Duty Free store is set to open in Thailand this year," he said. "Because of the Korean government's regulations on operators, we will keep participating in bids for overseas duty free shops."
Shilla is also boosting its efforts to open overseas shops. It said that it will open a duty free store in Tokyo this month, cooperating with Japan's A&S Takashimaya Duty Free Company.
Meanwhile, a bid for new duty free stores at the second passenger terminal in Incheon International Airport appears to be failing to attract operators. According to industry officials, none of the four conglomerates participated in the bid to get a license for a fashion accessories zone there.