Lotte Duty Free celebrates Changi contract extension; pledges more ‘WOWS’ and enhanced differentiation

“We will continue to collaborate with Changi Airport Group to strengthen customer experience programmes such as the WOWS (World of Wines and Spirits) event to differentiate our liquor operations and customer experiences,” says Lotte Duty Free CEO Kim Dong-ha.

May 11, 2025 - 03:31

Lotte Duty Free celebrates Changi contract extension; pledges more ‘WOWS’ and enhanced differentiation

SINGAPORE. South Korean travel retailer Lotte Duty Free today issued its first reaction to Friday’s news that it has been granted a three-year extension to its liquor & tobacco contract at Changi Airport, Singapore.

As reported, Singapore entity Lotte Travel Retail will commence its new three-year term on 9 June 2026.

The renewed contract embraces 18 stores and more than 8,600sq m of space across the airport’s four terminals.

Lotte Duty Free CEO Kim Dong-ha said, “We will continue to collaborate with Changi Airport Group (CAG) to strengthen various customer experience programmes such as the WOWS (World of Wines and Spirits) event to differentiate our liquor operations and customer experiences.

“As a global duty free brand, we will do our best to satisfy our customers.”

**Towering presence: Lotte Duty Free’s majestic, all-glass structure in Terminal 3 offers one of travel retail’s most alluring (and Instagrammable) experiences**

A Changi Airport Group spokesperson said, “Since the opening of Lotte Duty Free at Changi Airport, we have overcome various changes and difficulties in the duty-free market, including COVID-19, and have built trust with each other to lead business normalisation together.”

He added, “We will work with various liquor brands to provide special experiences to Lotte Duty Free and customers and strive to increase airport user satisfaction.” {Main story continues following sidebar below)

THE LONG AND (STEEP) WINDING ROAD

Comment: Lotte Duty Free has come a long way at Changi Airport since its calamitously timed debut on 9 June 2020 while the COVID-19 pandemic was raging, writes Martin Moodie.

The Singapore government applied some of the world’s strictest protective measures to keep COVID-19 at bay – and therefore its citizens in and visitors out.

Those policies saw Changi Airport passenger numbers collapse -83% year-on-year in 2020 to just 11.8 million, a stark contrast to the 68.3 million in 2019.

It wasn’t just the pandemic that hurt Lotte Duty Free, though, during the early stages of its tenure. By its own (internal) admission and in the view of Changi Airport Group and many brands, the retailer struggled to get to grip with the logistics of such a demanding, high-profile operation run with such slickness for many years by DFS Group.

Admittedly the long-time incumbent was a tough act to follow but after several missteps, Lotte Duty Free started to get it right, a transformation encapsulated by the January 2024 grand reopening of its central duplex wines, spirits & tobacco store at T3 and the formalisation of its by-then fully open 19-shop operation at the Singapore gateway.

The Korean travel retailer can at least begin its extended term this June knowing passenger traffic is on the up. Changi Airport served 67.7 million passengers in 2024 – 99.1% of the record 2019 68.3 million number.

Does that mean the good times are back? Hardly. The Chinese spend – as elsewhere – is horridly soft – and prevailing global economic uncertainty, much accentuated by US President Donald Trump’s tariff disputes means trading conditions will remain difficult.

Lotte Duty Free has the added challenge of Changi Airport Group’s (CAG) traditionally zealous pricing policy, driven by a desire to maximise value for its passenger base. CAG monitors liquor pricing at 18 Asia Pacific airports and expects Lotte Duty Free to price at or below the lowest (with some flexibility based on promotional offers elsewhere).

In these parlous times for travel retail, is it time to drop the price-comparison policy in favour of a more balanced but still value-centred approach?

Such challenges will have been at the heart of what must have been fascinating conversations over terms and conditions. In the past, CAG would have had travel retailers queuing up for a prime position at the Changi table. Given CAG’s financial expectations and the worrying market conditions that is no longer the case. Status quo – no doubt with some interesting variations – is therefore a good outcome for both parties.

As I said at the start, Lotte Duty Free has come a long way at Changi, truly an extraordinary airport deserving of great retail. “These guys are doing a really good job here,” one leading supplier told me yesterday. Today, unlike the early years of the contract, plenty would echo those sentiments. The road ahead might be challenging but at least it is nowhere near as steep as in June 2020.

Lotte Duty Free has been the exclusive Changi Airport liquor & tobacco retailer at Changi Airport Terminals 1, 2, 3, and 4 since 2020.

The Lotte Duty Free Changi Airport branch currently offers approximately 430 brands and plans to enhance that portfolio. The retailer recently became the first Asian travel retailer to launch SirDavis, the American whiskey created by musician Beyoncé Knowles-Carter in collaboration with Moët Hennessy.

Lotte Duty Free and Moët Hennessy launched SirDavis in style, its presence supported by a multi-touchpoint retail experience that includes gondolas, endcaps and a dedicated tasting cart, all featuring the whiskey’s signature metallic horse medallion branding

The company also recently introduced leading Indian single malt whiskey Paul John and plans further Apartnerships with popular global wines & spirits houses such as Kavalan from Taiwan, Rémy Cointreau-owned Bruichladdich and Lion-owned Four Pillars gin from Australia.

Lotte Duty Free pledged further differentiation through a greater focus on emerging and homegrown brands, such as Singapore Sling in a ready-to-drink format called Raffles Hotel..

Lotte Duty Free said it had been highly evaluated by CAG for introducing innovative cutting-edge technologies such as robotic bartenders and large LED walls providing differentiated shopping experiences and curating a diverse wine & spirits lineup even during the COVID-19 crisis.

Lotte Duty Free currently operates 12 stores in five countries overseas – Australia, (US island and unincorporated territory) Guam, Indonesia, Japan and Vietnam.

The retailer said it posted an approximate +10% increase in overseas sales during Q1 2025. “The strategy is to increase the proportion of overseas sales to over 30% within the next five years and leap forward as a leading global travel retail company,” it added.

Lotte Duty Free’s Changi Airport offer is highlighted by the spectacular, glass-framed Terminal 3 duplex store. Inside, travellers can discover a robotic bartender, a 9m diameter circle media, and a nature concept symbolising greenery and a lake.

TENDER ALERT

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