"In regular duty-free shops, you usually see luxury brands, but here, there are many quality Korean products. The prices are also reasonable, which I like," said Lee Sang-hoon, 53, who frequently travels from Vietnam for business. He was shopping for gifts at the 'K-Food' section of the policy duty-free shop located in Incheon International Airport's Terminal 2 (T2).
Another foreign tourist mentioned, "I heard Korean cosmetics are good, so I came to buy products recommended by a friend," as they browsed K-Beauty items.
The policy duty-free shops, operated by the Korea Small and Medium Enterprises and Startups Agency (HanYuwon), have established themselves as a global base for K-brands and outstanding small and medium enterprises.
According to HanYuwon, the policy duty-free shops opened two locations in T2 in January, adding to the two existing shops in Terminal 1 (T1) and bringing the total to six. These shops feature 3,313 products from 800 companies. Last year's sales reached 11.45 billion won, and cumulative sales for this year up to July totaled 5.59 billion won.
The layout of the T2 policy duty-free shops is strategically designed. Located next to the T2 VIP lounge, the shops cater to premium customers traveling on early morning or late-night flights, offering products that meet their needs. By prominently showcasing representative Korean brands (K-BRAND), the shops serve as a platform for global promotion, featuring a range of products from fashion and beauty to food and traditional souvenirs.
Products from small and medium enterprises sold in the policy duty-free shops are noted for their cost-effectiveness, aided by a reasonable commission structure. While large duty-free shops charge commissions of 50-60% of sales, the policy duty-free shops maintain a much lower rate of around 23%. A HanYuwon representative stated, "We supply excellent products sold at Olive Young and Coupang at affordable prices, and profits are reinvested into the stores for improvements such as renovations and promotional activities."
In T1, a pink-themed 'K-Brand' pop-up store has drawn attention. This experiential space allows customers to sample products, attracting both locals and foreigners, often leading to purchases. The pop-up store is strategically placed in a high-traffic area of the airport's duty-free zone to maximize promotional impact, with plans to feature 200 companies by mid-October.
The success of the companies in the policy duty-free shops is becoming evident. Kim Heung-tae, an executive at Ian Cosmetic, noted, "Thanks to the credibility gained from the policy duty-free shop, we secured a purchasing contract with a buyer in Osaka, Japan, and are in discussions for participation in a U.S. expo and expansion into Vietnam. Through promotions, we generated over 10 million won in sales within a month, significantly aiding our market development."
However, challenges remain. There is a need to expand beyond simple airport shops to establish footholds in major overseas cities. A HanYuwon representative suggested, "We should expand the policy duty-free shops in collaboration with local governments at major regional airports, such as Gimhae and Jeju, not just Incheon Airport."
* This article has been translated by AI.
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