(Hyundai Duty Free)
Hyundai Duty Free is expanding its business by securing the largest floor space within Incheon International Airport. The move is aimed at positioning itself at the center of a shift in the duty-free industry landscape, seeking to grow both scale and profitability.
According to industry sources on Tuesday, Hyundai Duty Free began operations in the DF2 zone across Terminals 1 and 2 at Incheon Airport. In addition to its existing DF5 and DF7 zones for luxury goods, fashion, and accessories, the company has expanded into cosmetics and liquor, now operating three out of the airport’s six duty-free zones.
Hyundai Duty Free has become the only operator handling all categories – from luxury and fashion to cosmetics and liquor – within the airport. The newly opened DF2 zone spans around 4,571 square meters and houses over 280 brands, including global beauty labels as well as liquor, tobacco, and food products.
The operating period is 7 years by default, extendable up to 10 years.
Incheon International Airport is considered the most symbolic duty-free business location in the industry, backed by steady international passenger demand. Operators that secure all categories have an advantage in boosting sales, as they can design integrated customer flows and purchasing experiences.
Hyundai Duty Free plans to target foreign customers by emphasizing K-beauty alongside luxury products. In Terminal 2, it will introduce a K-Cosmetics Zone, featuring Korean beauty brands such as Medicube. It also plans to incorporate experiential content such as AI-based skin analysis and personal color diagnostics.
Expectations for improved profitability are also growing. Airport duty-free shops have traditionally faced high rent burdens, but Hyundai Duty Free reportedly proposed a per-passenger rental fee of around 5,394 won ($3.6) in this bidding process – about 40 percent lower than the roughly 9,000 won level applied by existing operators such as Hotel Shilla and Shinsegae.
Combined with high average spending per customer due to category expansion, analysts see strong potential for earnings improvement. Perfumes, cosmetics, liquor, and tobacco are considered high-margin core product categories in duty-free retail.
Hyundai Duty Free has also shown signs of a turnaround following restructuring efforts, including store closures.
Last year, its sales reached 1.01 trillion won, up 4.3 percent on year, while operating profit reached 200 million won. This improvement reflects cost structure optimization through measures such as closing its Dongdaemun branch and downsizing its Trade Center branch.
The company is also expected to post a profit in the first quarter of this year.
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