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Tag: Lotte Duty Free

  • Lotte Duty Free sales hit all-time high of US$6.7 billion in 2018

    Lotte Duty Free sales hit all-time high of US$6.7 billion in 2018

    South Korea’s top travel retailer Lotte Duty Free reported best-ever sales of 7.5 trillion won (US$6.7 billion) last year on a surge in online sales and mass purchases by Chinese merchants seeking trade in shuttling goods to China. Lotte Duty Free said its annual sales last year hit a record high of 7.5 trillion won, up 25 percent from a year-ago period. In particular, sales from the online business soared 50 percent on year to 2 trillion won, contributing 25 percent to its total domestic sales thanks to successful upgrades of its online and mobile platforms and various promotional perks like online-only products and discount options.

    Lotte Duty Free’s main store in the bustling shopping district of Myeongdong in downtown Seoul remained the world’s single-largest revenue earner for three years in a row last year with annual sales up 35 percent at 4 trillion won and daily revenue at about 11 billion won as of Dec. 14.

    The Myeongdong store that opened in 1980 has kept on growth with sales reaching over 1 trillion won in 2011, 2 trillion won in 2015 and 3 trillion won in 2016 on increasing demand from individual merchants from the mainland who buy popular Korean duty-free goods in bulk to profit from reselling them in China.

    Lotte Duty Free has expanded its investment in domestic stores to draw more consumers. Its Myeongdong store was expanded in August 2016, and spent 10 billion won to add the Star Lounge for VIP customers in April 2018. The World-Tower store in the affluent Gangnam area of southern Seoul also posted 1 trillion won in sales last year, becoming the largest earner to reach the threshold in the district.

    Meanwhile, Lotte Duty Free World Tower also posted sales of more than 1 trillion won (US$895.4 million), joining what the retailer dubbed the “One Trillion Club” on 23 December.

    That represents an 80 percent increase year-on-year for the Jamsil, Seoul store, which reopened on 5 January 2017, 193 days after it was forced to close on 26 June 2016 due to the loss of its licence in an open tender.

    “Even in the midst of rapid market changes, Lotte Duty Free has been able to achieve a record-breaking year, reflecting 38 years of operational expertise,” said newly appointed Lotte Duty Free CEO Lee Kap. “As a leader in the industry, we will endeavour constantly to improve our performance.”

    Lotte Duty Free said that the World Tower store’s excellent tourist services and differentiated luxury brand offer had generated “remarkable achievements” in 2018. This was despite the proliferation of new duty free stores in the Gangnam area [notably the new Shinsegae Duty Free store opened on 18 July], the retailer commented.

    Despite industry difficulties posed by the THAAD dispute between South Korea and China, sales of small and medium enterprise SME Korean brands at the World Tower store increased by 300 percent year-on-year. This contributed to a “win-win relationship” with SMEs, Lotte said.

    Increased demand by daigou shoppers “greatly influenced” sales said Lotte. The retailer noted that such travellers had compensated for the “stagnation” of conventional Chinese tourism since the THAAD dispute erupted in March 2017. However, Korean travel retail executives and observers are closely monitoring the impact of China’s new e-commerce law, introduced on 1 January 2019, which is expected to hit the daigou business hard

  • Lacoste opens new travel retail store at Lotte Busan

    Lacoste opens new travel retail store at Lotte Busan

    LACOSTE has opened a new 30sqm duty-free store in Busan to further enhance their presence in Asia. This new store is located in LOTTE Duty Free, second largest duty free operator, in Busan, which is the second biggest city in South Korea.

    Travel Retail, often referred to as the “6th continent”, offers a unique opportunity to connect with consumers and highlight the brand all over the world.

    With over 170 boutiques worldwide, LACOSTE aims at reinforcing the
    consumer experience while enhancing channel specific product offering and visual merchandising.

    Looking to the future, the crocodile wants to continue to leverage the Travel Retail Channel strengthening or expand in new geographical areas and develop new channels (on-line duty free and cruises) and new ways of connecting with consumers before, during and after their trips.

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  • Lotte gears up for winter promotion at downtown and airport stores

    Lotte gears up for winter promotion at downtown and airport stores

    The winter promotion for Lotte Duty Free will kick off on 23 November and run until 2 January 2019. The large-scale event will see more than 50 overseas brands, including  MaxMara, Ferragamo and Vivienne Westwood, offered at a discount of 20-80%.

    During the six-week promotion, any customers spending more than $1 at the retailer’s Myeongdong head office, World Tower, Coex, Incheon Airport, Gimpo Airport, Busan or Jeju stores will be given the chance to enter a lottery. 10 winners from the lottery will be presented with a ₩3m ($2,658) travel voucher.

    Customers spending a certain amount instore will be entitled to giveaways and gifts with purchase. Those that more than $800 in Lotte’s World Tower or Coex downtown stores will receive tickets for the Picasso and Cubism Art Exhibition; those spending more than $300 at World Tower, Coex, Busan or Jeju from 28 November will receive a Lotte calendar, while those spending more than $300 at Incheon, Gimpo or Gimhae airports after 1 December will receive a free microfiber knee blanket; and those that spend more than $100 at the retailer’s Coex store will be awarded a scratch coupon.

  • 65% jump for Lotte Duty Free’s overseas sales

    65% jump for Lotte Duty Free’s overseas sales

    South Korean retail giant Lotte’s duty-free operator Lotte Duty Free posted a rapid hike in overseas sales in its quarterly performance report. According to the company, sales for the third quarter this year hit a record-high 4.1 trillion won (US$3.6 billion), a 25 percent on-year increase.

    The sales from its downtown city stores and its overseas stores amounted to 3.8 trillion won and 164 billion won, respectively.

    Lotte Duty Free currently operates seven overseas stores in countries including Japan, Vietnam and Thailand. Sales at its overseas stores increased 65 percent from a year ago, and the outlet in Vietnam recorded an 800 percent jump in sales.

    The company said it expects 200 billion won worth of overseas sales by year-end.

    It will also soon open its first duty-free store in Australia.

    According to the company, its operating profit in the third quarter totaled 228 billion won, representing an on-year jump of 550 percent.

    The company said the number proves that the retailer is recovering from China’s apparent retaliation over the deployment of the Terminal High Altitude Area Defense system here.

    After withdrawing stores from Terminal 1 at Incheon International Airport in February due to a sharp drop in sales, Lotte Duty Free is focusing on aggressive marketing for its online mall and its downtown outlets.

    Compared with last year, its sales online and at its downtown stores rose 42 percent and 50 percent, respectively, the company said.

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  • Duty-free sales may hit all-time record this year

    Duty-free sales may hit all-time record this year

    Korea’s duty-free sales are likely to set a new annual record this year despite Chinese group tour traffic not having fully recovered.  According to the Korea Duty Free Shops Association, duty-free store operators made $1.44 billion in October, a 28.6 percent increase year on year. This takes Korea’s total duty-free revenue between January and October to $14.3 billion, surpassing 2017’s full-year revenue of $12.8 billion.

    “The local duty-free market was 14 trillion won [$12.4 billion] in size last year – some forecast this year will reach a new all-time record of 18 trillion won,” said a source at one of Korea’s largest duty-free store operators.

    The growth is meaningful considering that Chinese group tours are not fully back in the market.

    Industry watchers and analysts attribute the increase in duty-free sales this year to “daigongs,” or individual Chinese merchants that purchase Korean goods and resell them at home.

    Before Chinese group tours were banned in March 2017 after Korea’s deployment of the U.S. Terminal High-Altitude Area Defense antimissile system, they were a major source of revenue for local duty-free stores. As traveling to Korea for Chinese became more difficult, the reselling business began to grow.

    “Revenues are going up this year but we’re still waiting for group tours to come back,” said another source at one of top three duty-free companies.

    Sales increases are generally good news, but industry watchers warn that operating profits will not grow as fast as revenues. Attracting daigongs entails high marketing costs. New duty-free outlets opened in Seoul this year, which means competition to pull in daigongs may become more intense.

    Signs suggest restrictions on group tours from China are easing. Some online tour agencies have started marketing group tour packages to Korea on their websites. Last week, China’s largest online tour agency Ctrip posted Korean tour products on its website, but erased them the same day.

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  • Lotte Duty Free’s expanded flagship Seoul store with focus on K brand

    Lotte Duty Free’s expanded flagship Seoul store with focus on K brand

    Lotte Duty Free has opened a new 519 square meters area at its flagship store in Myeong-dong, Seoul, with a strong emphasis on promoting small and medium-sized Korean brands. A highlight of the zone, located in the store’s Star Avenue, is ‘Blooming Beauty’, a shop-in-shop that houses around 130 brands, 60 of them small, emerging brands and 30 of them independently owned. These include the Marvel collection from The Face Shop, Medicube, Miba, Cosmetea, Wakemake and others.

    The company said it was “upgrading its incubation programme” for smaller brands, and would support them by distribution through its online sales channel and at its downtown Seoul outlets.

    It said that these brands would “demonstrate their sales potential” in the new environment.

    The store, it added, “will enhance customer convenience through brand diversification and space expansion”.

    To celebrate the opening of the new Star Avenue area, Lotte Duty Free presented gifts from 20 brand partners in the Blooming Beauty zone to shoppers who spent more than US$1.

    There are also special discounts for local residents until the end of October, and discounted sales of KT&G’s new ‘heat not burn’ product Lil will be available until 22 November.

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  • Shilla Duty Free wins Gimpo’s bid for L&T concession

    Shilla Duty Free wins Gimpo’s bid for L&T concession

    Shilla Duty Free wins the bid against Lotte Duty Free for Gimpo International Airport’s five-year liquor and tobacco concession.

    Gimpo is South Korea’s third busiest airport and the core duty categories will now be divided between South Korea’s two biggest duty free retailers – Shilla and Lotte.

    Last month, the two travel retail giants were shortlisted for the five-year concession covering two stores spanning 733sq m. It seems Shinsegae Duty Free had also submitted a bid, but did not make it to the shortlist.

    It appears Shilla’s strength in the business sustainability, financial health and investment category, counting for half of the overall score the bids were judged on, are what made the balance shift in their favor.

    The opening follows the exit of, previous incumbent, CityPlus due to unsustainable losses

    Even though Incheon International Airport is now the nation’s gateway, Gimpo still sees more than 25 million passengers every year.

  • Lotte Duty Free takes over Australia and NZ stores ownership

    Lotte Duty Free takes over Australia and NZ stores ownership

    Lotte Duty Free has bought a change of outlets in Australia and New Zealand from local operator JR Duty Free.

    The four Australian stories are in airports in Brisbane, Darwin and Canberra and in downtown Melbourne, while the New Zealand store is at Wellington airport.

    JR Duty Free reportedly operates seven stores in Oceania and five shops in Israel. Its revenue last year was US$617 million.

    Financial details of the deal were not revealed.

    Lotte Duty Free believes growing numbers of Chinese tourists into Oceania offer an opportunity to grow its business in the two markets.

    The South Korean company has been steadily enlarging its global footprint since 2012, expanding into Vietnam, Japan, Thailand, Indonesia and the US.

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  • Lotte duty free profit soars

    Lotte duty free profit soars

    South Korean duty-free operator Lotte has reported soaring profit following its decision to partially withdraw from Incheon airport.

    In the company’s first half report, it indicated solid worldwide sales accounted for the profit increase, which came to KRW155 billion (US$137 million) – up a staggering 1995 per cent.

    Total global sales hit KRW2.7 trillion (US$2.4 billion), almost all of which came from domestic sales.

    Three out of four concessions at Incheon were shuttered by the firm following long-running losses. The closures have saved the firm considerable expenditure on rent.

    The positive results have encouraged Lotte to expect overseas sales in excess of KRW200 billion (US$177.7 million) this year, following the launch of additional stores in Vietnam and elsewhere.

  • Lotte Duty Free exits Incheon Airport Terminal 1 contracts, sets its sights on Vietnam

    Lotte Duty Free exits Incheon Airport Terminal 1 contracts, sets its sights on Vietnam

    Lotte Duty Free exits its contentious Incheon International Airport Terminal 1 cosmetics, fashion and leathergoods contracts, to be replaced by Shinsegae Duty Free.

    As reported, South Korea’s duty free giant served notice on 13 February of its intention to quit three contracts – DF1 (P&C), DF5 (leathergoods & fashion) and DF8 (miscellaneous categories).

    The company cited “the burden of rent increases” following the sharp downturn in Chinese tourists in 2017 amid the THAAD dispute with China.

    The three concessions, later consolidated into two by Incheon International Airport Corporation, were subsequently awarded to Shinsegae Duty Free, which commences business on 1 August. Lotte Duty Free will continue to operate its DF3 liquor, tobacco and foods business at T1 until 2020.

    Lotte Duty Free said that it expects to save about 1.4 trillion won (US$1.25 billion) in rent by 2020 through its premature exit. “Based on improved profitability through the withdrawal from Incheon Airport, the company intends to strengthen its competitiveness in downtown duty free shops and to expand online duty free shop marketing,” it said.

    “In addition, in order to revitalise sales of our [T1] liquor and cigarettes stores, we plan to analyse outbound passengers and target enhanced marketing through improved linkage with city and online duty free shops.”

    Lotte said that it also aims to boost downtown and online sales of cosmetics and fashion to avoid losing custom to its Incheon successor. A customer prepaid card for Lotte’s vacated T1 business can now be used downtown.

    Lotte Duty Free plans to concentrate its efforts on expanding business overseas, with Vietnam the key focus. As reported, the company celebrated the grand opening of its Da Nang International Airport concession on 1 November last year, after a soft opening in May. The business, registered as Phu Khanh Duty Free, is a 60/40 joint venture between Lotte Duty Free and a local partner.

    In June this year Lotte Duty Free opened arrivals and departures stores at Cam Ranh International Airport in Nha Trang, after being awarded an exclusive ten-year duty free concession.

    Lotte said that it also plans to invest heavily in additional downtown stores in Hanoi, Ho Chi Minh City and Da Nang.

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  • Duty-free shops enjoy turnaround in 2018

    Duty-free shops enjoy turnaround in 2018

    Korean duty-free shops are reviving their once-stagnant sales, with Lotte, Shilla and Shinsegae leading the turnaround.

    According to the Korea Customs Service on Saturday, duty-free sales in the first half of the year reached 9.94 trillion won ($8.79 billion), up 38 percent from the same period last year.

    If the trend continues in the second half of this year, sales at duty-free shops will likely rise by 30 percent from last year’s 14.47 trillion won.

    Shinsegae Duty Free said on Tuesday that its daily average sales reached 1.7 billion won after the opening of its Gangnam branch in southern Seoul on July 18, far exceeding the company’s sales expectations of 1 billion won a day.

    “Our goal is to reach 180 billion won by the end of this year, and 500 billion during our first year of operation,” said Ahn Joo-yeon, a public relations manager for Shinsegae Duty Free. “We have a good start.”

    If sales at the company’s Gangnam branch continue at this pace, they will reach about 250 billion won this year.

    Chinese consumers made up about 90 percent of the foreign shoppers at Shinsegae Duty Free’s Gangnam branch.

    Group tourists accounted for 36 percent of overall foreign customers, while 64 percent were individual tourists.

    Starting early next month, Shinsegae will also begin operating in duty-free sections 1 and 5 of Incheon International Airport Terminal 1, which Lotte Duty Free withdrew from.

    Shinsegae estimates it will take in about 300 billion won in sales between this August and December.

    Shinsegae’s Terminal 2 Duty Free Shop, which opened early this year, is expected to bring in about 200 billion won in sales this year.

    “Total sales are expected to increase from 1.8 trillion won last year to around 3 trillion won this year,” a Shinsegae Duty Free official said.

    Shinsegae, once at the bottom of the Korean duty-free trinity, increased its market share this year.

    Industry experts predict that Shinsegae will take about 20 percent of the Korean duty-free market this year, up from 13 percent last year.

    Shilla Duty Free was behind Shinsegae in its bid for the Incheon Airport duty-free slots last month, but Shilla’s operating profit hasn’t taken any hits.

    Shilla’s duty-free shops in the Hong Kong, Singapore and Incheon airports continue draw in sales, and 42.6 percent of the company’s sales in the first quarter came from the airport shops.

    Shilla Duty Free saw a 29-percent rise in first quarter sales from 782.7 billion won last year to 1.37 trillion won this year, while operating profit rose 181 percent to 476 billion won.

    Shilla Duty Free brought in about 4 trillion won in sales last year, accounting for 27 percent of the market. It’s expected to have a similar market share this year.

    Lotte handed over two out of its three duty-free locations at Incheon International Airport Terminal 1 to Shinsegae this year and didn’t open any new locations.

    If Lotte Duty Free had operated all of its Terminal 1 locations until the end of its contract in 2020, it likely would have suffered losses. Lotte’s most valuable Terminal 1 duty-free section, the liquor and tobacco area, is still open.

    According to an official at Lotte Duty Free, sales at the duty-free store’s location in Sogong-dong, central Seoul, are expected to reach 4 trillion won this year, up 30 percent from 3.169 trillion won last year.

    Lotte, the world’s second-largest duty-free company after Dufry in Switzerland, has expanded its overseas duty-free shops, opening its seventh location in Nha Trang Airport in Vietnam at the end of last month.

    It also plans to bid on space in Taiwan’s Taoyuan Airport this month. Lotte is also in the process of acquiring JR Duty Free, an Australian company.

    Last year, Lotte Duty Free raked in 6.2 trillion won in sales, 150 billion of which were made overseas.

    “We will record 7 trillion won in sales at the Sogong location and 1 trillion won in the World Tower [southern Seoul] location within this year,” said a Lotte Duty Free official. “We expect to see a massive increase in operating profit from 2.5 billion last year, as well.”

  • Lotte Duty Free to open its second store in Vietnam

    Lotte Duty Free to open its second store in Vietnam

    Lotte Duty Free said Sunday that it has opened its second store in Vietnam at Nha Trang Cam Ranh International Airport as it strives to expand its presence in the Asian market and better serve Chinese and Russian visitors.

    The company, a major player in the duty-free business, said its new store started operating Saturday, as the new passenger terminal at the airport opened for business. It said Lotte has the sole rights to operate the duty-free store at the airport until 2028.

    The airport serves the Nha Trang area in the central part of the Southeast Asian country, with both domestic and international flights being offered to users.

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  • Lotte Duty Free will exit Incheon on 7 July 2018

    Lotte Duty Free will exit Incheon on 7 July 2018

    Lotte Duty Free announced today that it will exit three of its four loss-making concessions at Incheon International Airport Terminal 1 on 7 July.

    The move follows Incheon International Airport Corporation’s (IIAC) acceptance of the retailer’s contract resignation and Lotte’s payment of an undisclosed penalty charge.

    The exit date is 120 days from IIAC’s approval of the resignation.

    As reported, Lotte Duty resigned the DF1 (P&C), DF5 (leathergoods & fashion) and DF8 (all categories) concessions on 13 February. The contracts, which Lotte won in early 2015, were due to run from September 2015 to August 2020. Lotte Duty Free said that its T1 stores have recorded losses of KW200 billion (US$184 million) since 2016. The contracts would run up a deficit of KW1.4 trillion (US$1.3 billion), the retailer claimed, if the stores continued to operate for the full term in 2020.

    Lotte Duty Free will continue to operate the main T1 alcohol and tobacco business concession (DF3).

    Report said, IIAC will retender the three contracts, probably later this month.

    Normally, one would expect Lotte’s rivals The Shilla Duty Free and/or Shinsegae Duty Free, to seize on the opportunity to snap up more Incheon business. However, both companies are also locked in talks with IIAC to try to further reduce their own T1 concession fees in the wake of the dilutive impact of the T2 opening.

  • Lotte Duty Free plans expansion in Nha Trang

    Lotte Duty Free plans expansion in Nha Trang

    Korea’s Lotte Duty Free will open its second Vietnam airport store in Nha Trang next year.

    The store is set to locate at Cam Ranh International Airport’s new terminal which is now under construction, and on track to be complete in first half of 2018.

    The operator expects to gain US$644 million in sales from the new store over the next 10 years.

    The operator has recently completed its first airport store in Da Nang, with a part re-launched in May.

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  • Lotte Duty Free reveals winter season retail promotions and prizes

    Lotte Duty Free reveals winter season retail promotions and prizes

    The campaign will begin 24 November and continue through to 4 January 2018, as the retailer aims to drive sales over the holiday season and New Year.

    Around 40 brands including fashion and accessories from Bally, Coach, Vivienne Westwood, Marc Jacobs and Tory Birch are on promotion for discounts between 20% and 80% at major downtown Lotte Duty Free shops in South Korea.

    The festive promotion includes the opportunity to win prizes such as tickets to film and music events with minimum purchase. Customers spending over US$2,000 at the Lotte Myeongdong store will be entered into a draw for tickets to the Gwanghwamun Sonata.

    At the Lotte World Tower and COEX stores, tickets to Hamlet: Alive are on offer. Customers spending over US$700 by 10 December at the three stores mentioned will also have the opportunity to attend the movie premiere of With God. VIP tickets for 70 winners (and a guest) to attend the premiere at the Lotte Cinema World Tower Hotel on 18 December are available.

    Lotte’s seasonal programme for customers also includes activities with Korean Wave (hallyu) models and the opportunity to collect pre-paid discount cards.

    Customers spending over US$300 at the Myeongdong, World Tower and COEX stores will receive pre-paid discount cards of up to KRW280,000 (US$221) depending on amount spent.

    For customers who spend more than US$150 with the retailer at either Incheon International and Kimpo Airports, Lotte will present a prepaid discount card of up to KRW140,000 (US$129) and KRW240,000 (US$221) respectively.

    Shoppers spending more than US$200 at Lotte stores can also receive additional discount cards by collecting stamps each time they visit.

    On 1 December, the retailer will present its ‘Lotte Duty Free Shop 2018 Play Calendar’ at the Myeongdong, World Tower, COEX, Busan and Jeju stores. The calendar features images of hallyu stars Lee Min Ho, Lee Jong-suk, Exo and Twis that customers can colour-in with pencils provided.

    The retailer is also running a lottery for five winners to win a flight to Vietnam in celebration of the launch of flights between Incheon and Nha Trang airports. Customers need only spend US$1 at the airport Lotte Duty Free store to enter.

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