Lee Hyo-sik is Finance Desk editor at The Korea Times. He manages finance-related stories on macroeconomics, banks, stocks, bonds, crypto etc. He is passionate about covering what's happening in Korea's financial industry and explaining it to both Korean and non-Korean readers. You can reach him at leehs@koreatimes.co.kr. Your insights and feedbacks are always appreciated.
Who will get the 3 duty-free licenses?
By Lee Hyo-sik
Lotte, SK, Doosan, Shinsegae desperate to own retail’s ‘golden goose’
By Lee Hyo-sik
Lotte, SK, Doosan and Shinsegae are all making a last pitch to retain or take on three expiring duty-free licenses in Seoul, one day before the government decides on to whom it will grant the lucrative right.
With many possible scenarios, duty-free industry watchers are still scratching their heads over who will come out victorious in the four-way competition for the “golden goose” of the retail industry.
The Korea Customs Service (KCS) will hold a presentation session at its training center in Cheonan, South Chungcheong Province, on Saturday before it decides who will get the three expiring licenses.
The CEOs of Lotte Duty Free, SK Networks, Doosan Corp. and Shinsegae Duty Free will likely make a final pitch amid presentations before the judging panel consisting of KCS officials and private sector experts.
At stake are Walkerhill Duty Free in eastern Seoul, Lotte Duty Free in downtown Seoul and Lotte Duty Free in southeastern Seoul. The five-year licenses will expire between November and December. The KCS accepted bids in September.
According to the customs agency, the presentation session will begin at 8 a.m. Saturday. Only three people from each company will be allowed to take part in the presentation and cannot enter the room with smartphones or other electronic gadgets.
The judges will score each contender’s management capabilities, financial health, business environment, partnerships with small businesses, and community service programs. They will announce the winners late Saturday.
“Everything is still up in the air and anything is possible,” said a duty-free industry official who declined to be named. “Who knows what is going to happen? But I think who gives the best presentation on Saturday will be in a better position to win licenses when we consider what happened in July.”
In July, HDC Shilla Duty Free and Hanwha Galleria, who garnered higher scores on business presentations, secured two new licenses to open duty-free shops in Seoul.
Lotte, the nation's biggest duty-free shop operator, has been trying to renew licenses for two of its stores. The company said it will spend 150 billion won over the next five years to expand community services and share growth with small business partners.
SK Networks, which is desperate to keep its shop in the Sheraton Grande Walkerhill Hotel, said it will spend 240 billion won to improve tourism infrastructure and support small business partners and nearby merchants.
The company also seeks to run a duty-free store in Dongdaemun, a shopping district frequently visited by Chinese and other Asian tourists.
Doosan Group, which wants to transform the Doosan Tower in Dongdaemun into the country's largest duty-free store, pledged to donate 10 percent of the shop’s operating profits. The heavy-industry-focused conglomerate also said it will spend 20 billion won to set up a foundation designed to revitalize the Dongdaemun area.
Shinsegae, which failed to win the license in July, also wants to obtain one of three expiring licenses to open a shop at its department store headquarters in downtown Seoul near Myeongdong.
The group said if the company wins, it will invest 270 billion won to turn Seoul into an international destination for tourists on the level of Manhattan in New York City, U.S., Ginza in Tokyo, Japan and Tsim Sha Tsui of Hong Kong.