Changi Airport Group has awarded its liquor & tobacco concession tender to Lotte Duty Free. The company will succeed DFS Group when the concession contract expires next year.
The awarding of the liquor & tobacco concession ends a fierce contest between some of the world’s leading travel retailers, including Gebr Heinemann and The Shilla Duty Free.
Changi Airport Group (CAG) said it undertook a detailed evaluation process after tenders closed on August 26.
With experience operating concessions in markets including Australia, Japan, New Zealand, South Korea and Vietnam, Lotte Duty Free is the first new operator to take what is a key CAG concession which was with DFS Group for 40 years. DFS decided not to bid to renew the business, saying it was not commercially viable, and following a similar withdrawal from Hong Kong International Airport two years ago.
The contract awarded to Lotte is for a six-year term commencing on June 9. The tenancy contract covers all 18 liquor & tobacco stores across Changi’s four terminals, spanning more than 8000 sqm of retail space.
“The Liquor & Tobacco concession is one of the largest at Changi Airport and it presents unique opportunities for marketing innovation and customer engagement,” said Lim Peck Hoon, executive VP, commercial at CAG.
“Lotte put forth the strongest and most compelling proposal overall. It is aligned with CAG’s vision to offer passengers a seamless omni-channel retail experience and new retail-tainment initiatives leveraging smart technologies. Lotte also demonstrated a keen understanding of the market environment with a sound business plan supported by a competitive financial bid and backed up by solid business fundamentals.”
Lotte Duty Free has promised to offer a wide selection of liquor products and brands to Changi’s passengers. All the liquor and tobacco stores will be rejuvenated to attract both connoisseurs and new consumers. The company will also feature different boutique concepts and zones presenting the latest and exclusive products in the market.
CEO of Lotte Duty Free, Kap Lee, said: “I express my deep gratitude to Changi Airport Group for acknowledging Lotte Duty Free’s strength and strategy. Winning the Changi Airport’s liquor & tobacco duty free concession is of great significance in terms of establishing a bridgehead to achieve our vision of “Global No.1 Travel Retailer”. Lotte Duty Free will put its continuous efforts to grow as a global brand with Changi Airport.”
According to CAG, the transition towards the start of the new concession will be planned carefully with both the incoming and outgoing tenants. Renovation works in the stores will be conducted in phases to ensure that customers continue to enjoy a high standard of service.