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Tag: Lotte Duty Free

  • 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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  • Lotte Duty Free files complaint against airport

    Lotte Duty Free files complaint against airport

    Lotte Duty Free submitted a report to the Fair Trade Commission regarding its rent feud with Incheon International Airport, according to the leading duty-free operator.

    Korea’s largest duty-free operator and airport have gone through four unsuccessful discussions on the matter since mid-September, but this is the first time one of them has called in state officials.

    Lotte’s assertion is that Incheon International Airport violated the Monopoly Regulation and Fair Trade Act by setting up contract conditions that were unfavorable to the duty-free operator. If the request goes through, the FTC will embark on an investigation of its own or set up a definite deadline for the two to reach an agreement.

    In 2015, the two signed a five-year rent contract for Lotte’s operation there worth 4.1 trillion won (US$3.68 billion). The deal ran from September 2015 to August 2020.

    The company pinpointed two terms in the contract that they thought were “unfair.” One is a clause that prohibited any adjustments to the rent or security deposit due to changing management conditions or a drop in sales.

    “In nature, duty free businesses are vulnerable to international affairs and government policy changes,” said Lotte Duty Free in a statement. “The clause ignores the industry’s particular characteristic and rules out any possibility of renegotiation from situations that may be prompted from this.”

    The second disputed term states that the operator cannot pull out of the deal before half of the contract period has passed. Even if Lotte requests a revocation after this halfway point, it has to continue operations for four months from the withdrawal date.

    After the fourth discussion ended fruitlessly, Lotte discussed the possibility of closing down its operation in Incheon International Airport, which takes up about half the space allocated to duty free stores and generates 60 percent of the airport’s entire rent earnings from duty free.

    The number of Chinese tourists in Korea plummeted since March after tensions rose over Korea’s deployment of a U.S.-led antimissile system. Lotte says this left a huge void of customers – the company used to generate 70 percent of its annual sales from Chinese consumers.

    Under the current contract, Lotte Duty Free can pay a designated portion of its operating sales as rent. But there is also a minimum amount that the operator has to pay even if the sales figure falls below that threshold.

    As Lotte’s sales are lower, the sales figure does not reach the minimum amount. Lotte says that it cannot afford to pay the minimum amount due to unfavorable market conditions.

    Its counterpart Incheon International Airport rebutted the claims and remains firm that it will not alter the original contract conditions. The airport said the contract with Lotte was based on a mutual agreement that the market situation may change in the future.

    “The contract was already screened by the FTC so we’re not expecting any problems based on relevant laws,” it said in a statement.

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  • Double opening for Lotte Duty Free

    Double opening for Lotte Duty Free

    Following a soft opening in May, Lotte Duty Free has expanded its presence at Da Nang International Airport in Vietnam, with an official opening today.

    As the first Korean travel retailer to tap Vietnam, Lotte now has two stores at the airport, one of 974sqm and the other 117sqm. The opening was timed so the stores are trading before the 24th APEC Summit in Da Nang, which starts on Monday.

    Trading as Phu Khanh Duty Free, the main store had its soft opening in the new terminal in May as a JV between Lotte Duty Free (60 per cent) and a local partner, Phu Khanh Duty Free Trading Company. The store offers 115 brands, including 14 Korean labels, across such categories as tobacco, cosmetics, watches, accessories, eyewear and toys.

    Lotte Duty Free CEO Jang Sun-wook says Vietnam is expected to become a bridgehead for the company in Southeast Asia as a new market with soaring foreign tourism.

    He says the company is also considering opening an extra store in downtown Da Nang.

    Already the company is projecting sales of more than KW30 billion (US26.7 million) in the airport stores’ first full year of trading, and says it is seeking other travel-retail opportunities in Vietnam including Hanoi, Ho Chi Minh City and Nha Trang.

    Da Nang is expecting foreign tourist numbers to grow by 30 per cent this year to 2.1 million, the company says.

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  • Lotte Duty Free to take measures facing China tourism crisis

    Lotte Duty Free to take measures facing China tourism crisis

    Lotte Duty Free is implementing a number of measures to combat the crisis situation caused by China’s ban on tourists visiting South Korea.

    Over 40 executives will return 10% of their salary in a bid to alleviate some of the pressure on the company as a result of the lost business. The senior executives have more than 15 years of experience on average, Lotte said, and are all tax-exempt veterans.

    Lotte Duty Free CEO Jang Seon-wook: “The decline in sales is a shock that has been unprecedented since the founding of Lotte Duty Free in 2003, except for the SARS crisis.”

    As reported, South Korea’s decision to deploy the US defence system infuriated the Chinese government and led to a massive backlash against Korean companies. The tourism and travel retail sectors, heavily dependent on Chinese visitors, have been among the worst-affected.

    Lotte Duty Free discussed various methods of encouraging individual Chinese travellers and tourists from other countries in Southeast Asia to visit South Korea at a recent management strategy meeting.

    The meeting focused on how to revitalise sales and reduce costs, the retailer said, as it feared the Chinese ban could be a prolonged one. The company also noted the impact of fierce competition among duty free retailers in South Korea, which it said was “overheating”.

    “The THAAD situation is likely to be prolonged,” wrote CEO Jang Seon-wook in a letter to employees. “The decline in sales is a shock that has been unprecedented since the founding of Lotte Duty Free in 2003, except for the SARS crisis.”

    He said the company’s experience would see it through the crisis, and that it should focus on internal matters that it had control over. Zhang cited the loss and re-acquisition of the World Tower duty free licence as an example of overcoming a difficult situation.

    “If we can trust each other and cope with each other, we will become the cornerstone of growing Lotte Duty Free as a global number one company,” he told staff. “Everyone in the company will gather wisdom and enthusiasm.”

    Lotte Duty Free noted a survey conducted by the Korea Tourism Organization (KTO) in 2016 which showed that foreign tourists decided to visit South Korea 2.7 months before they travel on average. The retailer said this means that even if the THAAD dispute was solved immediately, there would still be a long delay in returning to ‘normal’ and that “long-term difficulties seem inevitable”.

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  • Lotte Duty Free taps Vietnam with new airport outlet

    Lotte Duty Free taps Vietnam with new airport outlet

    Lotte Duty Free, South Korea’s top duty-free operator, said it has set up a new outlet at a Vietnamese airport, making a foray into the Southeast Asian market.

    Lotte clinched a joint venture deal with a Vietnamese counterpart to co-run Phu Khanh Duty Free at the Da Nang International Airport, it said in a statement. The South Korean firm owns a 60-percent stake in the airport duty free. The official opening is slated for August, with only part of the shop currently operational. It sells perfume, cosmetics, food & beverage and liquor.

    Da Nang is one of the most popular holiday destinations among South Koreans. PHU KHANH Duty Free shop is located in the new Danang airport, which has been newly expanded due to the recent increase in visitors, and the international flights are on the way to accommodate 4 million passengers per year.

    Korea’s duty-free marketis suffering from a 30-40% decrease in sales due to the due largely to a void in Chinese visitors following Beijing’s trip restriction. Last month, the number of foreign visitors to Korea’s duty-free shop reached a record low this year, falling below 1 million. The number of foreigners who visited Korea’s duty-free shop in April dropped by 40 percent from 1,682,223 in January to 99,806.

    The launch of its Vietnamese duty-free shop underscores Lotte’s push to expand its overseas foothold. Lotte is the third-largest duty-free operator in the world, after Swiss-based Dufry A.G. and DFS of the United States.

    It is the first Korean duty-free operator to have tapped Vietnam.
    Lotte Duty Free said it is planning to open another city branch in Bangkok this month. It currently runs airport stores in Indonesia, Japan and Guam.

  • Cosmetics dominate Korean duty-free sector in 2016

    Cosmetics dominate Korean duty-free sector in 2016

    Make-up products accounted for more than half of the annual sales at duty-free shops in South Korea last year, fueled by brisk demand from foreign tourists immersed in Korean entertainment culture.

    Fresh data from the Korea Customs Service and companies reveals the combined cosmetics revenue from duty-free chains, including top players Lotte Duty Free and Shilla Duty Free, stood at 6.28 trillion won (US$5.48 billion) at the end of 2016, up 51.7 per cent from a year earlier.

    The sales of such beauty products took up 51.2 per cent of all sales, jumping from 45.1 per cent in 2015.

    Their proportion far outstripped those of other products, such as handbags or watches, whose sales grew 14 per cent and 7.6 per cent on-year in 2016, respectively.

    The upbeat figure came as Korean-made cosmetics have become very popular among Asian tourists who come here to shop, fascinated by Korean pop culture and TV drama series, a phenomenon commonly referred to as the Korean Wave or Hallyu.

    Local cosmetics companies have rushed to boost their marketing targeting these Hallyu fans, making advertisement clips using the celebrities who have gained popularity through movies and dramas exported to those countries.

    Thanks to such efforts, the revenue portion of domestic cosmetics brands at duty-free stores also made a big leap, accounting for nearly 40 per cent of the overall sales, the data showed.

    “The portion of Korean brands being sold at duty-free shops is growing rapidly unlike in the past when most of the top-selling items were imported products,” Ahn Ji-young, a market analyst at IBK Securities Co.

    Industry watchers said the cosmetics firms should plan ahead in developing products in line with a fast-changing beauty trends and discriminate their strategy by country or region.

    “Younger Chinese tourists these days are showing a tendency to fall for color make-up so the companies need to closely track such trend,” an industry source said.

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  • Lotte Duty Free sales up 25 per cent

    Lotte Duty Free sales up 25 per cent

    Lotte Duty Free has reported a 26 per cent increase in turnover to W5.9 trillion (US$5.1 billion) for last year.

    The figures are believed to excludes sales from its overseas airport and downtown outlets (Guam, Indonesia, Tokyo), reports DFNI Online.

    For 2015, its sales reached W4.82 trillion, a decline from W4.55 trillion the previous year.

    The Mers outbreak hit the retailer, despite it being awarded five-year contracts for two perfumes and cosmetics concessions and a liquor and tobacco concession at Seoul Incheon airport. It also beat off competition for a downtown duty-free shop in Jeju. The disease outbreak chopped off Chinese tourist arrivals to South Korea.

    Lotte Duty Free was further dented by the loss of its pivotal World Tower licence to travel retail newcomer Doosan Corporation (Doota Duty Free), but it has since regained the licence and re-opened the store.

    Marketing division manager Bo Joon Kim describes it as “one of the most chaotic times” in the group’s history.

    Lotte accounted for 48.7 per cent of total Korean duty-free sales last year, which amounted to W12.3 trillion. It started the year by opening its 4396 sqm Korean-style downtown duty-free store in Tokyo.

    Other developments included the reopening of its Gimpo airport store in August and the re-launch of its Gimhae airport outlets.

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  • Japan’s bakugai phenomenon fading fast

    Japan’s bakugai phenomenon fading fast

    The drastic slowdown of the Chinese duty-free shopping phenomenon known as bakugai (“buying explosion”) continues to hit Japanese tax- and duty-free retailers, with several companies having sharp revenue falls in recent months.

    As a result of the slowing market, South Korean travel retailer Lotte Duty Free and its partners Bic Camera and New Kansai International Airport Company have pulled out of a planned downtown duty-free shop proposed for Osaka.

    The “bakugai” trend began in Japan in 2015 as travelling shoppers from China poured into Japan in waves, says The Moodie Davitt Report. This led to a proliferation of government-backed tax- and duty-free stores, and like all bubbles this one appears to have burst. Read more.

  • Hyundai Department Store plans CoEx duty-free outlet

    Hyundai Department Store plans CoEx duty-free outlet

    Hyundai Department Store Group plans to open a 14,005 sqm duty-free store in the CoEx Convention and Exhibition Center in Samseong-Dong, Seoul, late this year.

    Hyundai joined rivals Lotte Duty Free and Shinsegae in securing five-year licences last month to run downtown duty-free stores in Seoul. The SME licence went to TopCity, with Alpensia and Busan Duty Free winning licences for stores in Gangwon Province and Busan.

    Hyundai Duty Free merchandising manager Hyunjin Lee says CoEx attracts independent travellers who are willing to experience Korean culture (K-wave).

    “This place will grow into a worldwide landmark in a few years when there is a Hyundai Global Business Center, underground transit complex and the Jamsil Sports Complex extension,” says Lee.

    “We will provide a differentiated duty-free store with luxury boutiques and customer lounges.”

    A wide selection of luxury items and Korean cosmetic products will be offered, says Lee. “We also plan to develop Kangnam tourist attractions, co-operating with entertainment companies and local government.”

    A key element in Hyundai Duty Free’s licence proposal was agreeing to a memorandum of understanding with the government to invest in tourism infrastructure development plus a commitment to contribute US$50 million in social welfare funds.

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  • Lotte, Hyundai, Shinsegae get duty free licenses

    Lotte, Hyundai, Shinsegae get duty free licenses

    Lotte Duty Free, Hyundai Duty Free and Shinsegae DF have snatched licenses for new duty free shops in Seoul, showing that retail specialists will have the upper hand over non-retail firms struggling in the market.

    However, the big three firms still have to brace for harsh competition in the already saturated market, as well as lingering questions about the fairness of the selection process due to possible ties to a corruption scandal engulfing President Park Geun-hye and her confidant Choi Soon-sil.

    The Korea Customs Service (KCS), Saturday, named the three firms as operators for three Seoul-based duty free outlets. Also, it said a fourth license for the city, reserved for small and medium-sized firms (SMEs), was taken by Top City Corp. Busan Duty Free and Alpensia won licenses for outlets in Busan and Gangwon Province, respectively.

    The three conglomerates are retail giants that run department stores in the country. Market watchers say their experience and expertise in attracting luxury brands as well as managing and running their stores worked favorably for them in the KCS evaluation.

    All three conglomerate-run shops will be based in southern Seoul. Hyundai, which earned the highest score in the KCS evaluation, will open an outlet near COEX in Samseong-dong. Lotte will reopen an outlet in its landmark Lotte World Tower in Jamsil. Shinsegae will have one in Central City in Seocho-gu.

    So far, most of the large duty free stores have been located north of the Han River. Top-seller Lotte Duty Free’s main store is located in Sogong-dong, while Shilla Duty Free is in Jangchung-dong and Dongwha Duty Free is in Sajik-dong. The combined earnings of the three outlets last year reached 3.85 trillion won.

    Market observers expect the fresh selection will create an opportunity to draw more tourists to southern Seoul and meet the growing demand for duty free shops in the region. According to the Korea Tourism Organization, the number of foreign tourists in those regions grew an average 19 percent annually from 2012 to 2015.

    With the new selections, however, more competitors are added to the already saturated duty free market in Seoul. Currently, nine duty free outlets are in operation in the city and the four companies will open their new stores next year.

    Data shows that the market is displaying signs of a widening gap between firms. Five duty free outlets that began operation after the government granted licenses last year have posted billions of won in operating losses.

    In the first three quarters this year, a Shinsegae shop in Myeongdong posted an operating loss of 37.2 billion won. Galleria Duty Free 63 on Yeouido and HDC Shilla Duty Free in Yongsan each recorded 30.5 billion won and 16.7 billion won in operating loss.

    SM Duty Free in Jongno-gu, which opened as an SME shop, also suffered a 20.6 billion won operating loss in the same period. Doota Duty Free in Dongdaemun did not disclose its data, but reportedly it posted an operating loss of 27 billion won in five months after opening in May.

    Another factor casting concern is the ongoing controversy that the selection was allegedly affected by Choi Soon-sil. Lotte and SK, which were among the candidates for the fresh selection, donated money to two nonprofit foundations controlled by Choi and the prosecution is suspecting the money worked in favor of the two companies.

    With Lotte winning one of the licenses, the controversy is likely to grow.

    The main opposition Democratic Party of Korea (DPK) said Sunday it is “suspicious of the KCS decision to press on with the selection process even though a special inspection over the scandal is ongoing regarding the matter.”

    The KCS said last December there would be no more selection for duty free operators but suddenly decided to offer more licenses in April.

    “There have been suspicions that SK Group head and President Park met privately over the duty free shops,” said DPK spokeswoman Park Kyung-mee.

  • Asia driving ‘significant’ growth in airport retail

    Asia driving ‘significant’ growth in airport retail

    Asia is driving “significant growth” in the global airport retail market, according to a new report from Credence Research.

    This is based on the increasing disposable income of middle-class families in emerging countries coupled with affordable travel options, says the report, Airport Retail Market – Growth, Share, Opportunities, Competitive Analysis, and Forecast 2016 – 2022.

    Emerging countries such as China and India are increasingly investing in new terminals and expanded retail areas.

    Widening budget options are boosting the number of travellers, particularly in Asia Pacific, says the report.

    Fashion and accessories is the largest product category in airport retail, accounting for more than half of revenue share. The segment can expect considerable growth, says the report.

    However, the fastest growth is expected in the F&B segment with rising sales for premium liquor products and the expansion of food chains.

    By store type the largest segment is the independent store and showroom. These are steadily growing in number with concessions being offered by airport authorities to local companies. The fastest growth is predicted in the duty-free stores segment, which is bolstered by more and more promotional activities.

    Asia Pacific is the largest regional market for airport retail, accounting for 40.5 per cent of revenue share last year. It is forecast to have the fastest growth, particularly in India, China, Australia and Southeast Asia countries.

    The report says the global airport retail industry is highly competitive with a strong multinational component. Major companies involved include Aer Rianta International, Autogrill, Dubai Duty Free, Dufry, Duty Free Shoppers, Heinemann, LS Travel Retail, Lotte Duty Free, Nuance Group, Shilla Duty Free and Stellar Partners.

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  • Lotte Duty Free Ginza store opens

    Lotte Duty Free Ginza store opens

    Tokyo’s new Lotte Duty Free Ginza is the largest duty-free store in the Japanese capital.

    Covering 4400 sqm, it occupies the entire eighth and ninth floors of the new Tokyu Plaza Ginza, at Sukiyabashi intersection, connecting the historic and cultural Hibiya district to Ginza, Japan’s most famous shopping street.

    With about 150 international brands, the store has luxury boutiques on the eighth floor, and international cosmetics on the other floor. Cosmetics include Estee Lauder, Lancome and Shiseido, fashion brands include Alexander McQueen, Coach, Gucci, Hugo Boss, Ralph Lauren, Zegna and South Korea’s MCM, while there will be watches from such brands as Blancpain and Omega.

    There is also a Japanese souvenirs section.

    Tokyu Plaza Ginza is an 11-storey retail, commercial and entertainment complex developed by theTokyu Land Corporation.

    Meanwhile, a two-level Lotte Duty Free store is also planned for Osaka, to open early next year.

  • Korean downtown duty free licence system under review

    Korean downtown duty free licence system under review

     

    In news that rocked the Korean travel-retail and duty-free world last November, Lotte Duty Free and Walkerhill Duty Free lost major downtown licenses to Shinsegae Duty Free and Doosan Group respectively, following a ground-breaking decision by the Korea Customs Service (KCS). But could they be granted a reprieve following a public hearing this week which discussed ways of easing regulations?

    The KCS’ decision to float key licenses—Lotte flagship and Lotte Tower stores, Walkerhill Duty Free’s downtown Seoul shop and Shinsegae’s Duty Free Busan operation—was in line with new regulations introduced in 2013. This meant contracts would expire after five years instead of the previous 10 and competition for licences would be encouraged at national level.

    The new regulations and KCS’ decision to rob Lotte of its invaluable World Tower Licence and SK Networks (Walkerhill Duty Free) of its flagship downtown duty-free operation it had operated for more than 25 years — DFNIonline understands both stores continue to trade until their futures are resolved once and for all— prompted strong criticism in Korea. It was widely believed such developments would hinder long-term investment and perhaps undermine global competitiveness of the country’s duty-free industry.

    During Wednesday’s hearing, The Korea Herald revealed officials proposed the issue of more licenses for duty-free shops in Seoul and return of 10-year expiration terms – previous terms were for five years. According to the publication, under the new proposals, the government could grant more duty-free licensees if the portion of foreigners and money spent at local duty-free shops exceeded 50% over the previous year. It could also do so if foreign visitors increased more than 300,000 in each municipality.

    While the Korean government believes the proposed new measures would make the local duty-free market more attractive compared to competition elsewhere and promote the tourist industry, the new operators do not share the same view. They believe they would only succeed in instigating “excessive rivalry” in a currently saturated market and re-invigorate Lotte and Shilla, which would not do them any favours. DFNIonline understands and appreciates both perspectives but the reality is that changes must be made for the sake of the industry.

    Quoting data released by the Seoul City government, indicating visitor numbers in the capital dropped 10.6 million last year from 11.4 million the year before, the Korean Herald report said: “The number of foreigners entering Korea via Incheon International airport and Gimpo airport also tumbled 5.9% and 11% respectively.

    ”The Korea Herald suggests the likes of Doosan Group, the heavy industry conglomerate, which confirmed to DFNIonline it is due to open its first store at the Doosan Tower in Dongdaemun in May and Shinsegae Duty Free, which already opened its new downtown store in March, believe the government has been “misled” by exaggerated tourism numbers.

    It also quoted an industry insider who commented: “New duty-free operators are set to invest K1.07trn ($896m) and hire 14,200 workers. But if we are going to have more operators even before setting the businesses, this would kill the entire duty-free market.”

    Lotte and Walkerhill Duty Free, however, refuted these claims, indicating the winners had previously urged the government to introduce more operators in the market, only to change their position once securing the licenses.

    Speaking to DFNIonline in December 2015 Lotte Duty Free marketing division managing director Bo Joon Kim said: “The reason why the duty-free market in Korea can be the world’s best is the constant investment and tremendous effort to attract foreign tourists to Korea.

    “However, if the operator changes every five years, the instability of the investment will not only hinder long-term investment, but create increased competition, which will eventually curtail service.”

    Kim also said a repeated change of operators would harm the global competitiveness of tourism in Korea and the duty-free market – Lotte Duty Free directly attracted 1.55 million foreign tourists to Korea in 2014 equating to 10.9% of the total number, he said.

    If local media reports are to be believed, the Finance Ministry will finalise the plan on duty-free operations this month. Do Lotte and Walkerhill really believe they will be granted new duty-free licences and is there a realistic chance these proposals will be implemented? Time will tell, but one thing is certain. Something has to be done.

     

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  • Lotte World Tower wins awards in challenging times

    Lotte World Tower wins awards in challenging times

    Lotte Duty Free’s $3bn 555m World Tower duty free store in Seoul has won three globally recognised and prestigious design awards for the first time in the Korean duty free business.

    Besides winning the ‘2015 Good Design Awards’ in the Environments category, the retailer also swept the board with three world-class prestigious design awards in the USA.

    Sun-wook Jang, President of Lotte Duty Free said: “Lotte Duty Free World Tower has contributed a lot in promoting the new duty free shopping environment. I’m so glad that we won the prestigious global design awards for the first time as a Korean duty free shop.”

    The retailer says it is the first duty free shop in Korea to win the Good Designs Awards prize, although it should be said that celebrations related to this high recognition are doubtless a little less than normal, considering Lotte actually lost its duty free licence back in November of last year.

    [Lotte Duty Free] Interior of the Worldtower store (3)

    [Lotte Duty Free] Interior of the Worldtower store (2)

    Lotte Duty Free opened its $3bn World Tower branch in the southern Seoul Chamshil area of Gangnam on October 16, 2015

    The duty free industry in Seoul was shocked at the time, although we understands that Lotte has since been investigating whether it will be possible to transfer one of its other Seoul duty free retail licences to the World Tower 11,000sq m operation to maintain its ‘downtown duty free’ status which it still holds at this time.

    But this aside, few could argue that the building itself is not a huge achievement and this has been recognised with these latest awards. South Korea’s largest duty free retailer says that the interior design was optimised for shopping right from the very beginning, with high ceilings to allow brands to express offers and cultures.

    In addition, the retailer has installed ‘world-class’ LED screens to support the environmental design in harmony with the digital era.

    In a statement, the retailer said: “The Media Wall (large LED screens), the Column (cylindrical LED screens surrounding the columns) and the Cylinder (LED screens hanging on the ceiling) make the place new and trendy.

    [Lotte Duty Free] Interior of the Worldtower store (1)

    [Lotte Duty Free] Interior of the Worldtower store (4)

    Within the store, chiffon and indirect lighting has been used to create an effect of ‘the sun shining through white clouds’. Other features include a large number of HD TV screens located around the store, providing details of products and special promotions. At the opening these featured exclusive promotional advertisements featuring the top model Su Hyun Kim.

    “The company has invested more than three thousand million Won ($2.4m) for installation [and] six hundred million Won ($498,174) for the initial stage of content development, which needs a steady investment.”

    Lotte adds that the three LED installations are integrated throughout the shop space, with the video content alternating throughout the day to offer entertainment, local heritage and natural environmental content.

    The company concluded: “The distinct shopping experience of [the] Lotte Duty Free World Tower store which presents the new cultural experience beyond shopping has been highly valued in terms of design by the awards.

    “Besides, the company has won the Bronze prize of HUB Prize (USA) in [the] Brand Experience category and [the] Merit award of Graphis Competition (USA) in Innovative Environment category.”

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  • Lotte Duty Free in shock Seoul licence loss

    South Korea’s Lotte Duty Free has lost the licence to operate one of its large stores in downtown Seoul.

    Beleaguered Lotte – in the midst of a family feud over its management and on the eve of a planned IPO of its Hotels unit – has been displaced by heavy industries company Doosan Co in the 10,990 sqm store in South Korea’s tallest building – the Lotte World Tower and Mall.

    Lotte has had the licence to run the store for five years and sunk US$255 million into the site.

    “The customs agency decision has shattered its ambitions to grow it into the world’s largest duty-free outlet over the next decade,” reported Japan Today newspaper in Tokyo.

    “The setback was particularly badly timed given the preparations for an initial public offering of shares in Lotte’s hotel unit, which runs the group’s duty-free business.”

    Lotte’s duty free business is a subsidiary of Lotte Hotels, contributing 80 per cent of the operation’s revenues.

    Park Jong-Dae, analyst at Hana Financial Securities, said investors are concerned the loss of the licence will hurt Hotel Lotte’s overall profits.

    “As a result, the company’s valuation may fall when it goes public,” he said.

    Lotte Duty Free’s flagship Myeong-dong store is unaffected.

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