[THE INVESTOR] Hyundai Motor
Group is considering supporting Hyundai Department Store Group’s bid for a duty-free license in downtown Seoul, industry sources said on Oct. 6.
Earlier this week, Hyundai Department Store submitted an application to operate a duty-free store, selecting its Coex branch in Samseong-dong, Gangnam, as candidate site.
Hyundai Department Store Coex branch in Samseong-dong, Seoul.
The retail giant which lost the bid last year, is making an all-out efforts this time to obtain a license.
In its latest bid, the retail conglomerate will highlight its synergy with Hyundai Motor Group, which is building its new headquarters – 105-story skyscraper Hyundai Global Business Center -- just around the corner from the proposed site for the duty-free store.
According to sources, it is likely that the new shop will be relocated inside the GBC edifice once the construction is completed in 2021. The new duty-free bid is also good for Hyundai Motor that needs to attract visitors to its multibillion dollar landmark when it is completed.
Market watchers say if the two groups that broke off from Hyundai Group and are headed by cousins, team up, Hyundai Department Store will have a higher chance against its stronger and more experienced rivals.
“For a year, we fiercely prepared after failing to get a license last year,” Lee Dong-ho, CEO of Hyundai Department Store said after submitting the application to the Korea Customs Service, which is in charge of the selection process, on Oct. 4. “I’m confident of obtaining the license for a duty-free shop in downtown Seoul this year.”
Hyundai Department Store said the location, right next to Coex Mall, is ideal to attract individual and business tourists in southern Seoul, as the area houses a convention center, the largest underground mall, city airport terminal, hotels and other cultural complexes such as a movie theaters and an aquarium. The retail giant said it will secure parking space enough to accommodate up to 5 million Chinese visitors a year.
This year, a total of five conglomerates, including Hyundai, have submitted their bids to KCS. Hotel Lotte and SK Networks, who shut down their Seoul stores after losing the bid last year, are vying again, while last year’s winners Shinsegae and HDC Shilla Duty Free -- a joint venture between Hotel Shilla and Hyundai Development Company -- are eying to open new outlets.
Only three slots are open for the large firms and one for a small and medium enterprise in Seoul. Adding two new stores in Gangwon Province and Busan, the KCS is granting six new operational rights this year. It plans to make the final decision in December after evaluating each firm’s capability.
The competition is fiercer this year as it could be, according to industry insiders, the last time for companies to compete in the lucrative duty-free race as there are already too many stores in the country.
By Ahn Sung-mi (email@example.com