INCHEON KOREA - The government will allow small-sized or middle-standing enterprises to set up shop in the duty-free area within Incheon International Airport. This is the first time for the duty-free area in the airport to host shops run by small companies. The Korea Customs Service posted on November 27 on its website that it would receive applications for new retail shop operators in the immigration area past the departure gate. The application deadline is until February 26 next year.

The new sales area up for auction includes 12 sections in which Lotte, Shilla, and Korea Tourism Organization are currently running their duty-free shop business. Of these, the Korea Customs Service decided to reserve four sections to smaller business operators.

 

The decision was based on a pledge made in September by the agency's commissioner in the National Assembly's strategy & finance committee testimony that his agency would allow increased participation of smaller companies in airport duty-free shop operation.

 

But the problem is there are not many small companies that are deep-pocketed enough to pay high lease cost for five-year rental period. Currently major duty-free shop operators like Lotte and Shilla are paying about 20 million won a year per square meter. With a store space of 1,500 square meters, one has to pay 30 billion won in annual rental cost. In addition, the upfront deposit is as high as a half of the first year's annual rental cost.

 

 

Article provided by The Korea Economic Daily