Incheon: Lotte Duty Free and Hyundai DF Co. have announced they obtained approval to manage duty-free zones at Incheon International Airport, previously vacated by two other retailers.

According to Yonhap News Agency, the two companies submitted their bids in January to gain the licenses for the DF1 and DF2 zones. Last month, the Incheon International Airport Corp. (IIAC), which operates the airport, chose Lotte and Hyundai as the preferred bidders.

The previous operators, Shinsegae Duty Free Inc. and Hotel Shilla Co., decided to relinquish their licenses due to declining sales. With the Korea Customs Service's approval, Lotte and Hyundai will manage the DF1 and DF2 zones, respectively, under a seven-year agreement that extends through June 2033. The contracts have a potential extension option, allowing for up to 10 years of operation.

A representative from Lotte stated that they anticipate generating over 600 billion won (approximately US$420 million) in annual sales from the DF1 zone. Hyundai, on the other hand, expects to achieve annual sales of 1.1 trillion won in their duty-free business. Shinsegae intends to end its operations in the DF2 zone by April 27, although it will continue to run its duty-free shops in the airport's DF4 zone. Last September, Hotel Shilla returned its DF1 license to the airport operator.

The DF1 and DF2 zones primarily offer cosmetics, perfumes, liquor, and tobacco products. Duty-free operators have been facing increasing losses due to challenging market conditions, such as a weak won, slower economic growth, and a reduction in spending by key customers.