Hyundai Department Store announced Thursday that it would join the bid for a license to open a city duty-free store in Seoul, adding fuel to the fierce competition in the 3.2 trillion won ($2.9 billion) market.
In its first attempt to join the bid, company chairman Chung Ji-sun is facing competition from his uncle Chung Mong-gyu, chairman of Hyundai Development Co.
Ji-sun is the grandchild of the late Hyundai Group founder Chung Ju-yung. Mong-gyu is the only child of the late former Hyundai Development Co. chairman Chung Se-yung, who is a younger brother of the group founder.
In its first attempt to join the bid, company chairman Chung Ji-sun is facing competition from his uncle Chung Mong-gyu, chairman of Hyundai Development Co.
Ji-sun is the grandchild of the late Hyundai Group founder Chung Ju-yung. Mong-gyu is the only child of the late former Hyundai Development Co. chairman Chung Se-yung, who is a younger brother of the group founder.
“We’ve been preparing for the bidding since late last year by forming a new division,” a Hyundai Department Store spokesman said.
Hyundai Development already made it official earlier this month that it would inject 100 billion won into building a shopping complex, including a duty-free store, in Yongsan, Seoul.
The gold rush to win a city duty-free license comes after the government said on Jan. 19 that it would add three duty-free stores in Seoul and one on Jejudo Island, in addition to the six existing city-duty free stores in Seoul and two on the island. For Seoul shops, major retail giants including Shinsegae Department Store and Hanwha Galleria already confirmed their interest in the bidding.
Market insiders said the competition is fiercer than ever as the duty-free industry in Korea is highly lucrative.
According to the Korea Customs Service, which supervises the bidding process, annual sales of local duty-free stores have continuously increased since 2005. Sales have jumped from 6.8 trillion won to 8.3 trillion won from 2005 to present, a customs official noted. City duty-free businesses alone posted 3.2 trillion won in sales in 2013, the data showed.
The KCS said it would soon give public notice of the bid and the decision will be made in August.
“The bidders will be evaluated based on a number of categories, including operation plan, financing and the average number of visitors in the area,” a customs official said, wishing to stay anonymous.
“Hanwha Galleria is most enthusiastic about starting a duty-free store.”
By Suk Gee-hyun (monicasuk@heraldcorp.com)
