Louis Vuitton: expanding into the airport retailing sector

In a move reflecting the growing demand for luxury duty free shopping in Asia Pacific, fashion house Louis Vuitton has chosen Incheon Airport in South Korea as the location for its first ever airport store. The brand's regional popularity combined with Incheon's growth as a major transport hub should spell success for the company, and will likely pave the way for future travel sector ventures. On September 10, 2011, LVMH's Louis Vuitton opened its first airport store, in Incheon International Airport, South Korea, in partnership with the South Korean travel retailer Shilla Duty Free.

The store is located in the departures lounge in a new retail area that has been created especially for Louis Vuitton. The unit occupies approximately 550 sq m, making it one of the largest single-brand boutiques to be opened in an airport, and is expected to generate sales of $100m during its first year, according to the Incheon International Airport Corporation and Shilla. Louis Vuitton's products are well suited to international airport retailing, with fashion and accessories accounting for over 20% of the global airport retail market, according to research by Verdict.

Moreover, much of the growth in demand for luxury goods in Asia Pacific comes from consumers who are likely to be engaged in international travel, such as business people. South Korean men in particular are becoming more open to the idea of purchasing luxury brands now that they are more readily available in South Korean department stores. However, the attractiveness of Incheon is as much down to the growth in international visitors as it is to local demand.

Handling almost 33 million international travelers in 2010 and benefiting from many inbound travelers from China and Japan, the airport is now the eighth busiest in the world, according to Airports Council International data. It also stands out in terms of quality assessments undertaken by the organization. If the South Korean venture delivers strong results, the luxury brand will inevitably reconsider store openings in other major airports throughout the region.