Lotte Duty Free to expand into Thailand
New shop in Bangkok to break market monopoly by local player
MARIMI KISHIMOTO, Nikkei staff writer
BANGKOK -- South Korea's Lotte Duty Free will open its first Thai store here as early as June, ending a local company's exclusive grip on the market.
Ranking third worldwide in the lucrative duty-free shop market, the Lotte Group unit also has stores in Japan, the U.S. and Indonesia.
Its first Thai store will open inside Show DC, a commercial complex roughly 30 minutes from Suvarnabhumi and Don Muang international airports. The roughly 10,000-sq.-meter space will cost slightly more than 2 billion baht ($58 million) to build and sell about 20,000 items, centering on South Korean cosmetics.
Various entry barriers have kept local conglomerate King Power Group the sole player in Thailand's duty-free market. But the government has paved the way for market deregulation, with an eye toward attracting more foreign tourists. King Power operates duty-free stores at major Thai airports and other locations. It aims to invest 2.5 billion baht this year in Thailand and increase sales by 20% to 92 billion baht.
U.K. research company GlobalData estimates that Thailand's duty-free market will grow by 8% on average in the five years through 2021, buoyed by an increasing number of foreign tourists. That growth rate is the fifth highest in the Asia-Pacific region, trailing only India, Japan, China and South Korea.