Lotte Duty Free, a subsidiary of Lotte Group, will co-operate with a local firm to open a new airport duty free store in Cam Ranh International Airport of Nha Trang, which is a part of its plan to solidify its foothold in Vietnam, according to newswire Koreaherald.
|Lotte Duty Free outlet in Danang |
The new store will mark its second airport outlet in Vietnam as well as Southeast Asia, and its seventh overseas location.
The company has secured exclusive rights to run the store until 2028, taking up 1,680 square metres at Cam Ranh International Airport’s new terminal, according to officials.
The Nha Trang business will be run by local joint venture Phu Khanh Duty Free, in which Lotte has a 60 per cent holding. The company expects to attain some KRW700 billion ($644 million) in sales over the upcoming 10 years of operation.
Its revenue target is considered feasible as Nha Trang has recently become the largest tourist destination in central Vietnam, attracting some 1.2 million foreigners last year.
|Lotte Duty Free CEO Jang Sun-wook stated that it aims to open additional outlets in Vietnam’s major cities like Hanoi and Ho Chi Minh City over the next three years. |
Furthermore, its positive results with the first outlet in Danang International Airport also contributed to their confidence.
Earlier in November last year, Lotte Duty Free officially opened its first outlet in Vietnam at Danang International Airport, also through a joint venture with Phu Khanh Duty Free, after starting pilot trading operations in May. This was the first duty-free outlet in Vietnam established by a Korean operator.
At the time, Lotte Duty Free CEO Jang Sun-wook stated that Lotte Duty Free would thrive in the Vietnamese market by offering a combination of differentiated services.
According to newswire The Investor, on February 14, Lotte Duty Free reported that the firm’s outlet at Danang International Airport earned $463,649 in net profit.
Regarding local players in the duty-free sector, over the course of 25 years, the Southern Airports Services JSC (SASCO) has proven itself to be the most competent player in the field of airport services in Vietnam.
As of May, the firm ran 20 duty-free stores of international standard, selling more than 12,000 items from well-known international brands. The shopping precinct has proven to be the most commercially attractive area in airports . Boasting more than 30,000 traditional handicraft items and regional Vietnamese specialties, SASCO Shop provides enjoyable shopping for tourists.
According to its financial statement for the third quarter of last year, the duty-free chain contributed a large part to SASCO’s consolidated revenue. Notably, in the last nine months of last year, the firm earned VND818 billion ($35.64 million) in revenue from duty-free stores, equalling VND91 billion ($3.96 million) per month.