April 19, 2017 2:07 am JST

Lotte Duty Free to expand into Thailand

New shop in Bangkok to break market monopoly by local player

MARIMI KISHIMOTO, Nikkei staff writer

Lotte Duty Free is the third largest duty-free shop operator in the world.

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.

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