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Tag: Shilla

  • Shilla Duty Free To Cease Operations At Incheon Airport Amid Financial Struggles

    Shilla Duty Free To Cease Operations At Incheon Airport Amid Financial Struggles

    Shilla Duty Free has declared its intention to halt operations at its DF1 duty-free store at Incheon International Airport in March. This follows the store’s excessive losses and the concession’s business value falling below its liquidation value.

    Financial Impact of the Decision

    The DF1 concession recorded a revenue of KRW$429.2 billion (US$312 million) in the past fiscal year, contributing 10.9 per cent to Shilla’s overall sales.

    The company commented on the changing climate of the duty-free market, since inking the contract for the duty-free store at Incheon International Airport in 2023. It noted the rapid shifts in consumer behavior and diminished buying power. The company has approached the Incheon International Airport Corporation to adjust the rent, but the request was turned down.

    This resolution was approved by the board on September 18 and was revealed in a Korea Exchange filing.

    Company’s Future Outlook

    Shilla anticipates a short-term drop in sales as a consequence of the exit. However, the company maintains an optimistic outlook for a more robust financial performance in the medium to long term.

    The company stated, “We believe it is crucial to enhance our financial structure and increase corporate and shareholder value.” Despite the ongoing challenges in the duty-free industry, the company pledged to maximize efforts to boost profitability.

    Other Changes in the Duty Free Landscape

    In addition to Shilla, Shinsegae Duty Free has also relinquished its business rights at Incheon. Both retailers had sought to reduce their rent by up to 40 per cent on their perfume, cosmetics, liquor, and tobacco concessions at Terminals 1 and 2. However, the Incheon International Airport Corporation (IIAC) declined these requests, asserting that rental terms were established in the original bids and could not be altered beyond the stipulations outlined by law.

    Questions & Answers

    Why is Shilla Duty Free suspending its operations at Incheon International Airport?

    Shilla Duty Free has cited “excessive losses” and a business value now lower than its liquidation value as reasons for its decision to suspend operations.

    What impact will this decision have on Shilla Duty Free’s sales?

    While the company expects a temporary dip in sales due to the closure, it foresees a stronger overall financial performance over the medium to long term.

    Have other duty-free stores at Incheon International Airport made similar moves?

    Yes, aside from Shilla, Shinsegae Duty Free has also given up its business rights at Incheon. Both companies unsuccessfully attempted to negotiate a reduction in rent.

  • King Power duty free monopoly ending soon

    King Power duty free monopoly ending soon

    Thailand’s much-maligned airport duty-free monopoly appears set to be nearing an end. For years, major Thai retailers have complained that incumbent operator King Power has controlled the retail offer – and prices – at Thailand’s largest airports, especially Suvarnabhumi outside Bangkok. Frequent travellers often comment that airport ‘duty-free’ prices are higher than at other airports in the region, including Singapore and Hong Kong.

    On Wednesday, state-owned Airports of Thailand (AOT) approved guidelines for concessions for duty-free and commercial activities at its airports, the first step in opening up retail spaces to other companies.

    According to Reuters, AOT will offer three retail licences at an upcoming auction, clearing the way for Thai retail giants Central Group and The Mall Group, along with South Korea’s Hotel Shilla, to enter the fray.

    King Power’s current licence ends next year.

    AOT says contracts will cover duty-free retail, commercial businesses such as food and beverage outlets and pick-up counters for shoppers who buy goods in town and collect them at the airport after clearing customs and immigration.

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  • The Shilla Duty Free partners with comics strip artists

    The Shilla Duty Free partners with comics strip artists

    The Shilla Duty Free is partnering with popular Chinese webtoon artists to boost its appeal to travelling Chinese shoppers. The travel retailer said that this is the first marketing partnership of its kind in the Korean duty free industry. Webtoons have become an increasingly influential media tool to connect closely with consumers, Shilla noted. “Unlike traditional advertisements, webtoons use storytelling that is easily relatable while utilising artists’ existing fandom.”

    The partnership with two webtoon artists, Niu Hong Hong (牛轰轰) and Ruo Guan (弱冠), specifically targets Chinese women in their 20s to 30s – The Shilla Duty Free’s main customer base (as the charts below show, visitors between 21 and 40 made up 57.3 percent of Chinese arrivals in South Korea last year and those between 21 and 30 almost 31 percent).

    Shilla’s stores are being featured in webtoons and the contents promoted through each artist’s social media platforms.

    Real-time comments such as “I would like to shop there”; “I should visit there during my next visit to Korea”; and “I like the store interior” appear on the webtoons.

    Besides introducing The Shilla Duty Free shops, the webtoons also highlight nine local eateries near the retailer’s flagship Seoul Store, showcasing the surrounding area as a local attraction. Since 2016, The Shilla Duty Free has promoted its local communities by introducing nearby restaurants through various channels such as The Shilla Online Duty Free in Chinese and its official Weibo account.

    A spokesperson said, “The partnership with Chinese webtoon artists is a first in the industry. We expect to be able to connect better with Chinese customers. Creative marketing like this will be continued during the peak seasons such as Chinese Lunar New Year, the Mid-Autumn Festival and the National Day of China, to broaden the communication with our customers.”

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  • Shilla Vietnam to open hotel at Da Nang

    Shilla Vietnam to open hotel at Da Nang

    Hotel Shilla announced Tuesday that it will actively begin expanding its brand abroad this year, the first new location being a resort in Da Nang, Vietnam. “Starting with Da Nang, we hope to expand our brand to more than 10 overseas locations in Southeast Asia, United States and China,” the hotel company said in a statement. Hotel Shilla is Samsung’s hotel and duty-free business arm. The 46-year-old company currently operates The Shilla Seoul and The Shilla Jeju.

    It also runs 11 business hotels under its Shilla Stay name.

    The company said that it will expand overseas through hotel management agreements with local companies, a common structuring for hotel chains. This means the local partner will own the hotel building while Shilla will operate the business. For Shilla, this minimizes investment risks.

    Shilla’s new Da Nang hotel – slated to open this year under the brand-new Shilla Monogram name – will be a nine-floor building with 300 rooms. The hotel will be located on Non Nuoc Beach in Da Nang, a popular destination for Korean tourists.

    The hotel, still under construction, will feature an outdoor pool, restaurants and bars. Every room will be equipped with a balcony.

    Hotel Shilla also announced that it is preparing to open a 200-room premium business hotel in San Jose in Silicon Valley, California, under its Shilla Stay brand by 2021.

    “We hope to continue raising more revenues abroad by expanding our overseas hotel business,” said a Hotel Shilla spokesperson.

    Some 20 percent of the company’s total revenues today, or 1 trillion won ($892.5 million), come from abroad. Hotel Shilla operates several duty-free stores in domestic and foreign airports, including locations at three of Asia’s busiest airports: Singapore’s Changi Airport, Hong Kong International Airport and Incheon International Airport.

    Hotel Shilla has been operating Jinji Lake Shilla Hotel in Suzhou, China, since 2006. It was the first overseas hotel managed by the company.

    Following Tuesday’s announcement, Hotel Shilla’s stock prices closed at 76,100 won on Tuesday, 1.33 percent higher than Monday.

    As for upcoming domestic projects, Hotel Shilla is planning to open a hotel themed after hanok, or traditional Korean houses, by 2023 in central Seoul.

    If the company receives approval to build the new hotel from domestic land authorities, it will become the first to operate such a hotel in Seoul.

  • Shilla Duty Free recruits Asia’s top social media influencers to pitch K-beauty

    Shilla Duty Free recruits Asia’s top social media influencers to pitch K-beauty

    South Korean Hotel Shilla has recruited five social media influencers across Asian countries to hype K-beauty products through Shilla Duty Free stores. The company said that it will work with top influencers from China, Japan, Vietnam, Malaysia, and Thailand on its “Beauty&You” project to guide customers on how to shop at travel retail online stores via social media platforms.

    Social media influencers with access to a large audience can endorse opinions about products and services, which eventually leads to promote sales.

    Those influencers who have partnered up with Shilla Duty Free reportedly have more than 1.7 million followers worldwide in total. They will work with the travel retailer to guide customers on how to use Shilla Duty Free online store as well as show the latest makeup trends using Korean cosmetics products via their social media channels.

    The company expects its partnership with the top influencers to bolster its brand awareness across the world on top of expanding its share in online travel retail market.

    Currently, its online duty-free shop is available in four languages – Korean, Chinese, Japanese, and English. It also has offline outlets overseas in international airports of Singapore, Hong Kong, and Macao as well as downtown Tokyo and Phuket.

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  • Shilla duty free open new store

    Shilla duty free open new store

    Shilla Duty Free opens at Gimpo International Airport’s international terminal on Wednesday. The duty-free store run by Hotel Shilla was approved by the government in June last year in a bid against Lotte Duty Free. The duty-free store is renting the place for five years.

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  • Singapore Changi Airport extends key DFS

    Singapore Changi Airport extends key DFS

    Key Changi Airport duty-free liquor and beauty concessions held by DFS and Shilla Travel have been extended for two years. The extensions will start from 2020 after the expiration of their current six-year concessions. Over the past four years, the airport’s two core-category concessions have involved pioneering retail concepts including unique duplex stores and the world’s first airport integrated duty-free zone.

    Executive VP of commercial at Changi Lim Peck Hoon said: “We are very pleased to continue our partnership with DFS and The Shilla Duty Free for another two years. Their passion for the travel retail industry continue to deliver new ideas and novel retail concepts at Changi Airport, and were instrumental in driving sales growth over the past four years.”

    A release from the company stated that Changi plans to leverage new technologies and innovations for a seamless retail experience when passengers shop from online to offline, from before they fly to the time they board.
    The extended tenancy terms for the liquor concession will commence from April 9, 2020 until April 8, 2022, covering 18 stores and spanning more than 8000sqm of retail space in Terminals 1, 2, 3 and 4.

    For the beauty concession, the extended tenancy terms will begin from October 1, 2020 to September 30, 2022, covering 22 outlets and spanning more than 7400sqm of retail space across Changi Airport’s four terminals.

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  • Shilla Travel Retail Hong Kong appoints new MD

    Shilla Travel Retail Hong Kong appoints new MD

    The Shilla Duty Free has appointed a new MD of its Hong Kong operations. Changha Shin takes over the helm of Shilla Travel Retail Hong Kong this week after the surprise departure of Alice Woo. Woo built the business up after becoming its first employee last year when the Korean-owned travel retail company secured major duty-free concessions at Hong Kong International Airport.

    Prior to working with Shilla, Woo spent 22 years in travel retail in Asia, Hawaii and North America, with companies including DFS Group and Nuance Watson.

    Her replacement Shin was previously the merchandising director of Shilla Travel Retail Hong Kong. In a short statement, Shilla said Shin has a wealth of knowledge across various product categories with 14 years of experience. He started in HR with Shilla Group and has “deep knowledge” of Shilla Group and its partners.

    “The Shilla Duty Free is proud to promote from within and support the development of its staff.”

    Woo will leave her position this week with the change referred to being due to “internal circumstances”. It is unclear if she will remain with the company in another role.

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  • Shinsegae wins Incheon duty-free license

    Shinsegae wins Incheon duty-free license

    Shinsegae Duty Free won two licenses to operate at Incheon International Airport’s Terminal 1 on Friday, beating out Shilla Duty Free in the competitive battle for lucrative slots at one of the world’s most trafficked airports.

    The Korea Customs Service said Shinsegae will be allowed to operate stores in the DF1 and DF5 zones of Terminal 1 from next month until July 2023. In total, Shinsegae now occupies four out of eight duty-free zones allocated to major conglomerates. The other four are run by Lotte Duty Free and Shilla Duty Free. Another four are reserved for smaller operators.

    “DF1 and DF5 are significant spots in terms of size and items they’re allowed to sell,” said a spokesman for Incheon International Airport Corporation, which determines what types of products can be sold in each zone. “DF1 is for cosmetics and perfume, while DF5 is for leather accessories and fashion.”

    The two zones combined occupy more than 8,000 square meters (86,000 square feet), nearly half of Terminal 1’s total duty-free space. Lotte Duty Free, the market leader, initially held the fort but decided to give up the license in February after failing to secure lower rent from Incheon International Airport. It later re-entered the bid after the airport offered cheaper rent.

    Combined, DF1 and DF5 stores used to generate 800 to 900 billion won ($720 to 810 million) a year, equivalent to 6 to 7 percent of the Korean duty-free market’s total sales.

    Shinsegae and Shilla were the final competitors among four bidders that submitted applications to Incheon International Airport Corporation last month. Lotte Duty Free and Doosan Duty Free were ruled out in the first round of evaluation.

    The final round pitted two retail giants run by conglomerate family daughters: Chung Yoo-kyung of Shinsegae Department Store and Lee Boo-jin of Hotel Shilla. Chief executives from the two companies – Han In-kyu for Shilla Duty Free and Son Yung-sik for Shinsegae Duty Free – presented their business plans to customs officials at the Customs Border Control Training Institute in Cheonan, South Chungcheong, on Friday. Officials then assigned each plan a grade.

    Industry sources speculate that Shinsegae’s higher bidding price did the work. Among a total of 1,000 points in the customs office’s grading scale, bidding price took up 400 points. Shinsegae offered 337 billion won for the two zones, while Shilla offered 269.8 billion won.

    In the duty-free industry, the bid upended a market long dominated by Lotte and Shilla. Shinsegae is a relative newcomer in the game, entering in 2012 after acquiring the duty-free business of Paradise Hotel.

    As of last year, the market share of the three major operators was 41.9 percent for Lotte, 29.7 percent for Shilla and 12.7 percent for Shinsegae.

    Shinsegae’s bid win on Friday, though, raises its share to 19 percent, while Lotte’s falls to 36 percent because of the lost space at Incheon. Shilla’s share remains unchanged at 29.7 percent.

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  • Shilla Duty Free sets up second presence in Incheon airport

    Shilla Duty Free sets up second presence in Incheon airport

    With its new second store at Incheon International Airport (IIA), Shilla Duty Free says it now has cosmetics and perfume outlets at all passenger terminals in Asia’s three largest airports.

    The South Korean duty-free retailer says it has shops at all four terminals at Singapore’s Changi Airport and at Chek Lap Kok Airport in Hong Kong. Its first store at IIA opened in 2001.

    Cosmetics and perfume are considered key duty-free items as they generate strong revenue. In the case of IIA’s duty-free shops, cosmetics and perfume account for 38 per cent of all sales.

    Shilla Duty Free, part of Hotel Shilla, says it expects overseas business to soon exceed KW1 trillion (US$939 million).

    Its new store covers 2100sqm and offers products from 110 brands including Chanel, Dior, Estee Lauder, Lancome, SK-II and Sulwhasoo. It features a “digital beauty bar” that uses such technology as a VR “beauty mirror”.

  • The Shilla Duty Free and AmorePacific launch pop-up ‘Beauty Truck’

    The Shilla Duty Free and AmorePacific launch pop-up ‘Beauty Truck’

    The Shilla Duty Free and AmorePacific have introduced a pop-up ‘Beauty Truck’ store to promote the Korean skincare house’s MakeOn brand. The pop-up, which launched on 22 June and will stay open till 19 July, is located outside the travel retailer’s flagship store in downtown Seoul.

    The five-tonne Beauty Truck, painted vivid pink, is intended to capture visitor interest as soon as they arrive at the main store.

    MakeOn is described as a “self-aesthetic device that allows facial cleansing, make-up and massage” at any time and any place.

    MakeOn beauty devices offer skincare treatments through energy – combining light, heat, ion and motion. MakeOn’s four top items can be experienced at the pop-up store: Cleansing Enhancer, Skin Light Therapy, Makeup Enhancer and Magnetite Roller.

    Pop-up store staff provide product support and product explanations in Korean, English and Chinese. All items are available for sale inside the main store.

    Pop-up store visitors receive discount coupons and free gifts from MakeOn and AmorePacific, including a -10% discount coupon for MakeOn products a and pink fan featuring the brand’s logo.

    Free samples of highly popular AmorePacific cosmetics brand Laneige are given to visitors taking and sharing pictures in the MakeOn photo zone. Additional Laneige samples are given to visitors boarding the truck and experiencing MakeOn treatment.

    Shoppers who visit the MakeOn shop in The Shilla Duty Free Seoul store receive a MakeOn gold pouch. An additional beach bag is given to those who purchase at the shop.

    The Shilla Duty Free is airing live social media broadcasts at the pop-up store for Chinese, Southeast Asian and South Korean followers in Chinese, English and Korean. KOLs (Key Opinion Leaders) for each language are visiting the pop-up, and describing their experiences in an effort to generate on-line buzz and word of mouth via social media.

    While The Shilla Duty Free has long focused on social media events for Chinese followers, this is the first time that the retailer has aired live broadcasts in other languages. Shilla says it plans to increase social media events and live feeds for Southeast Asian and South Korean consumers following the Beauty Truck initiative.

    The company commented: “This brand new concept pop-up store is The Shilla Duty Free’s latest endeavour to provide an unique and differentiated customer experience especially focused on the beauty category. The Shilla Duty Free, the first operator to run the cosmetics & perfume category in all three major hub airports in East Asia [ncheon, Changi and, soon, Hong Kong International -Ed, is eager to offer an unparalleled beauty experience to customers.”

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  • Shilla duty free opens mobile app, online mall for Japanese clients

    Shilla duty free opens mobile app, online mall for Japanese clients

    Shilla Duty Free has launched a mobile app and an Internet website mall targeting Japanese clients to offset the decline in Chinese tourists triggered by the missile defense system row between Seoul and Beijing.

    It is Shilla Duty Free’s second mobile shopping mall for foreigners after one opened for Chinese customers in 2014.
    Chinese travel agencies have in recent months suspended sales of tour packages to South Korea as part of the Beijing government’s retaliation against Seoul’s decision to station the US Terminal High Altitude Area Defense system on its soil. China believes the missile system undermines its security interest. South Korea has maintained that THAAD’s sole aim is to counter North Korea’s evolving nuclear and missile threats.

    Shilla’s mobile app store and Internet shopping mall allow Japanese customers to use Naver Corp.’s flagship LINE messenger to carry out transactions.
    LINE has become a major mobile messenger platform with more than 200 million users around the world. It has a strong presence in Japan.

    The duty-free shop will also invite 1,000 Japanese clients to a fan meeting of popular K-pop boy group SHINee, the shop’s commercial model, in Seoul on May 13. The number of Japanese tourists rose 25 percent last year from the previous year, according to the Korea Tourism Organization. The figure also surged 13 percent and 28 percent in January and February of this year from the same period in 2016.

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  • Takashimaya Duty Free Shop opening soon

    Takashimaya Duty Free Shop opening soon

    Takashimaya Duty Free Shop, Tokyo’s latest downtown duty-free store, will open late next month.

    The 2800 sqm retail outlet is a JV between department store company Takashimaya, travel retailer ANA Trading and Hotel Shilla. It will be on the 11th floor of the new Takashimaya Times Square development, in the Shinjuku area.

    Other major downtown duty-free projects scheduled to open in Tokyo include Japan Duty Free Ginza and Lotte Duty Free Tokyo Ginza.

    Takashimaya Duty Free Shop is directly connected to Shinjuku Station and to Shinjuku Expressway Bus Terminal, allowing easy access to Tokyo’s airports.

    A spokesperson for The Shilla Duty Free says Japanese cosmetics will be a key focus of the store. There will also be a tax-free zone for Japanese brands including cosmetics, food/confectionery, souvenirs, fashion and electronics.

    Goods bought at downtown duty-free stores must be collected at Narita or Haneda airport, while tax-free Japanese-made items can be collected in the stores.
    Chinese group tours will be a target audience, with Takashimaya Duty Free establishing infrastructure such as bus parking spaces, and developing offers to appeal to such visitors.

    A&S Takashimaya Duty Free Company was established last June, with Takashimaya holding a 60 per cent stake, with ANA Trading and Shilla each holding 20 per cent.

    Takashimaya Times Square includes a Takashimaya department store, brands like Nitori, Tokyo Hands and Uniqlo, as well as restaurants and a spa avenue.

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  • Guerlain and Shilla open new Changi T1 ‘exclusive outpost’

    Guerlain and Shilla open new Changi T1 ‘exclusive outpost’

    Between March 1 to April 12, Changi Airport and its exclusive perfume and cosmetics retailer The Shilla Duty Free have teamed up to create ‘an exclusive Outpost’ within the Terminal 1 Cosmetics & Perfumes central store to mark the launch of the brand’s new fragrance – Mon Guerlain.

    Located next to the transit departure hall this new presentation is designed to give visitors and customers ’a rare glimpse’ of the brand’s DNA and heritage, utilising a an olfactory journey of Mon Guerlain with a Fragrance Organ display.

    This is designed to provide ‘compelling insights’ into the story behind the Mon Guerlain fragrance and how it was created. The Mon Guerlain creation was first imagined by Thierry Wasser, the famous fifth Guerlain perfumer and it was turned into reality ‘for the extraordinary, sincere and authentic woman’, says Guerlain.

    ‘RECOGNISING THE AMBIGUITY OF MALE AND FEMALE SCENTS…’

    It adds that the fragrance begins with the base notes of Tahitensis Vanilla, along with subtle notes of Carla Lavender, Sambac Jasmine and Santalum Album Sandalwood.

    The company said: “The result is an exceptional fragrance that reconciles the divide and ambiguity of masculine and feminine scents. Mon Guerlain comes beautifully encased in a quadrilobe bottle, an iconic design that owes its name to its unique stopper, formed from a solid piece to attain the shape that resembles four lobes.

    “Angelina Jolie is the muse who inspired the birth of Mon Guerlain and her love for tattoos is widely celebrated through the new fragrance. Perfume is likened to having an invisible tattoo on the skin, and drawing on this unique concept, a Guerlain Tattoo Atelier has been specially created at the Outpost to complement and deliver a unique experience to travellers.

    TATTOO ARTISTS ON HAND…

    “A tattoo artist will be present at selected timings to create beautiful gold tattoo art that expresses the spirit and DNA of Mon Guerlain. Travellers can choose from six preset Guerlain flash tattoos, or even enjoy a customised hand-drawn gold tattoo adapted from preset designs.”

    Guerlain says travellers ‘are also in for a riveting treat’ as the Fragrance Organ display includes a grand showcase of the limited edition Mon Guerlain Bee Bottles, an exclusive exhibit at this Outpost, which is also available for sale.

    An emblematic symbol of the Guerlain House, the Bee bottle pays tribute to the beauty, elegance and charm of Her Majesty Empress Eugénie, wife of Napoleon III. Embodying extreme precision and refinement, each Bee bottle is painstakingly dressed in baudruche and embellished with silk cords by the skilful hands of Guerlain’s nimble-fingered craftsmen.

    Commenting on the initiative Guerlain’s Regional Director Travel Retail Asia Caroline Teichteil said: “Guerlain is thrilled to present its first-ever Outpost at Singapore Changi Airport. Mon Guerlain is a fragrance that embodies modern femininity and we believe that this collection will greatly resonate with the stylish globe-trotter and become a must-have essential in their beauty kit.”

    PERSONALISED SHOPPING EXPERIENCE

    Teo Chew Hoon, Changi Airport Group’s Senior Vice President of Airside Concessions added: “The innovative and interactive concept of the Guerlain outpost will further elevate the retail experience at Changi. Whether it is exploring the exclusive exhibition of the Mon Guerlain Bee Bottles, or visiting the Guerlain Tattoo Atelier, travellers can expect a personalised shopping experience filled with surprises.

    Raelene Johnson, Head of Global Merchandise Division, The Shilla Duty Free added: “The Shilla Duty Free has always been committed to working closely with Changi Airport and our brand partners to present exciting experiences for our global shoppers.

    “The Mon Guerlain Outpost offers activities that give travellers an immersive, multi-sensory experience. We are also thrilled to educate shoppers about the artisanal craft behind Guerlain’s fragrance-making as they discover the intricacies of the perfumery world through the eyes its perfumer,”

    SIZES AND ADDED INCENTIVES…

    The new fragrance is available as a 50ml Mon Guerlain EDP Fragrance (S$133.00) or 100ml (S$189.00) and Tier 1 Customers will receive a miniature Mon Guerlain EDP fragrance (5ml) with every purchase of the 50ml Mon Guerlain EDP fragrance.

    Tier 2 Customers will receive a miniature Mon Guerlain EDP fragrance (5ml) and body lotion (30ml) with every purchase of the 100ml and Tier 3 will be given a miniature Mon Guerlain EDP fragrance (5ml), body lotion (30ml) and mini candle with a minimum spend of S$430 (including a Mon Guerlain EDP fragrance of any size).

    Last, but not least, ISHOPCHANGI.COM customers will receive a Mon Guerlain EDP miniature and an exclusive Guerlain bracelet with any purchase of the Mon Guerlain EDP fragrances (50ml or 100ml).

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  • Cosmetics sales surge as Korean duty free market rockets

    Cosmetics sales surge as Korean duty free market rockets

    The Korean duty free market surged by 33.5% year-on-year in 2016 to KW12.2 trillion (US$10.5 billion), according to new figures from Korea Customs Service.

    The results reflect a strong bounce-back from the MERS-ravaged 2015, allied to booming Chinese visitor numbers last year.

    Chinese arrivals for 2016 rose +34.8% to 8,067,722, according to Korea Tourism Organization figures published today, a 46.8% share of total visitors. Japanese arrivals also rose sharply, up +25% to 2,297,893, a 13.3% share of total arrivals. Korean departures rose +15.9% in the year to 22,383,190

    Duty free sales to foreigners (dominated by the Chinese followed by Japanese) rose +44.1% to KW8.8 trillion (US$7.5 billion)

    Cosmetics, driven by booming sales of skincare (particularly Korean brands), accounted for 51.2% of turnover. Here are the leading categories:

    Korea_Table_600

    Lotte Duty Free stretched its lead as the dominant force, racking up a +26% increase in sales to KW5.973 trillion (US$5.1 billion), a stunning performance given that the retailer had to close down its Lotte World Tower Duty Free store in late June.

    Lotte’s nearest rival, The Shilla Duty Free, posted a +31.5% increase year-on-year to KW3.405 trillion (US$2.9 billion). Its Seoul flagship generated revenues of KW1.739 trillion (US$1.49 billion) while its Incheon International Airport stores posted sales of KW0.697 trillion (US$596.7 million)

    Fast-rising Shinsegae Duty Free posted sales of KW0.9608 trillion (US$822.4 million). Its new store in Myeong-dong, Seoul, which only opened on 1 May, generated sales of KW0.349 trillion (US$298.7 million). Its downtown Busan store (relocated in March to Centum City) posted revenues of KW0.336 trillion (US$287.8 million). Dongwha Duty Free in Seoul posted sales of KW0.3547 trillion (US$306 million)

    Of the recent sector newcomers HDC Shilla generated sales of KW0.3971 trillion (US$340 million); Galleria 63 Duty Free reached KW0.224 trillion (US$191.7 million), Doota Duty Dree KW0.111 trillion (US$95 million) and SM (Hana Tour) KW0.056 trillion (US$47.9 million).