Korean’s can now have a taste of Croatia under the market slogan, “Croatian beer froths up in the Korean market,” as from last week in South Korea, Croatia’s very own Ožujsko beer can be purchased.
The liquor importer CKB will be pushing out 4 kinds of Ožujsko to the Korean market, of which two will be lagers and two will be the sweet fruit-flavors (Radler lemon and grapefruit). The lager-style Ožujsko has 5% alcohol content and the fruit-flavored types hold only 2%, assures the Korean portal.
“Ožujsko is the top-selling beer in the European country, with a 40% market share,” said the statement by CKB, the liquor importer of Ožujsko in Korea.
You can now find the popular Croatian Ožujsko available in all major retail chains in South Korea, and a 330-milliliter bottle will cost 2,300 won (around 14 kuna), while a 550-milliliter can will cost 2,500 won (around 15 kuna) at big malls across the country.
The pending talks with South Korea follow similar dialogues the UK has opened with Australia, China, the Gulf Cooperation Council, India, New Zealand and Norway
London: The UK and South Korea are set to to begin regular trade talks, with luxury brands a particularly promising topic, as Britain prepares to expand its commercial reach once it has left the European Union.
A formal working group of ministers from the two countries will meet as many as four times a year to discuss removing barriers to commerce and prospects for “future, ambitious trade opportunities” after the UK exits the EU, the British government said in an statement on Sunday.
Prime Minister Theresa May has promised to make the UK a leader in liberalising trade around the world after Brexit. Yet Britain is unable to strike its own free-trade deals — or even being formal negotiations — while still a member of the EU.
“We want to take advantage of all the opportunities available to us to ensure that Britain becomes a global leader in free trade,” UK International Trade Secretary Liam Fox said in an emailed statement. “The agreement of this latest trade dialogue shows that government is preparing for Brexit, not prevaricating.”
The pending talks with South Korea follow similar dialogues the UK has opened with Australia, China, the Gulf Cooperation Council, India, New Zealand and Norway in the six months since voters chose in a referendum to leave the EU. Trade and investment between the UK and South Korea is worth about 10.9 billion pounds ($13.6 billion) a year, according to British estimates. The UK is the fifth-largest foreign direct investor in South Korea.
The UK government said in its statement that South Korea is an especially promising market for luxury brands such as Burberry Group Plc, which has 70 stores in the country, and high-end automakers Jaguar Land Rover and Bentley. Other sectors with strong potential include renewable energy and nuclear decommissioning.
“What we’re doing is putting in place plans to ensure the UK remains open for business and trade links continue to strengthen,” Fox said. “Important like-minded free trading partners like Korea and others are telling us they’ve heard that message loud and clear. Korea itself is a prime example to the world of how free and open trade can lift countries out of poverty to prosperity.”
The Korea Customs Service will begin evaluations for the much coveted duty-free licenses today, and the winners will be announced Saturday.
Despite the political scandal surrounding the process, five bidders have been competitively releasing their plans for investment to gain favor in the selection process.
Three out of four of the new licenses are allocated for conglomerates, for which five retail giants – Lotte Duty Free, HDC Shilla Duty Free, Shinsegae Duty Free, SK Networks and Hyundai Department Store – submitted bids in early October.
Lotte Duty Free, which seeks to reopen a store at the Lotte World Tower in Jamsil, said it would invest 2.3 trillion won ($1.97 billion) over five years to establish tourism infrastructure in southern Seoul. The company intends to use the Seokchon River and Olympic Stadium nearby to organize a cherry blossom festival in April and a fall festival in November. The Lotte Duty Free in Jamsil would be the largest duty-free store in Korea.
SK Networks wants to revive the Walkerhill Duty Free in Gwangjin District, near Seoul’s eastern end. One of the company’s grand plans is to open a resort spa that would add to the area’s scarce tourist sites. It was the only bidder to propose tourism development outside of Seoul in Gapyeong, Gyeonggi, which is popular with domestic tourists with venues such as Namiseom Island and Petit France.
Shinsegae Duty Free promised to invest 350 billion won to expand the tourism infrastructure around Seocho and Gangnam District, near where it hopes to build its second branch. The company’s strength is in its location, Banpo-dong, in Seoul’s center. Its plans for tourism and cultural development are focused on promoting infrastructure in the area, such as pedestrian passages around landmarks like the Seoul Arts Center in Seocho-dong or the Floating Island, and a premium gourmet festival in Itaewon.
HDC Shilla Duty Free, run by Hotel Shilla and Hyundai Development Company, has focused on IT and Korean culture, to attract young tourists to a second branch at Samseong-dong in Gangnam, southern Seoul. HDC Shilla’s focus is to collaborate with small and midsize shops in its second branch, particularly in cosmetics, accessories and food.
Hyundai Duty Free is going for another shot to open in COEX. Its initial plan submitted in October said the company would invest 30 billion won in Gangnam’s tourism in the next five years. Hyundai’s plan focuses on Korean pop culture, including an idol theme park beside COEX. Last month, it said its 50 billion won plan includes support for Gangnam’s cultural development and donations to the needy.
Meanwhile, 61 independent and opposition party lawmakers released a statement Tuesday requesting that KCS postpone selecting duty-free operators until suspicions about Lotte and SK Group are resolved. The companies are being investigated for promising licenses in return for donations this year to K-Sports Foundation, a nonprofit linked to President Park Geun-hye’s confidante Choi Soon-sil.
However, the Korea Customs Service said that many companies have been awaiting a decision, which cannot be delayed over political matters. The office said Wednesday it would rather take back licenses afterward from companies found to have conducted illegal practices for the selection.
It also said it will release detailed evaluations of companies selected as winners. In November 2015, the office was criticized after Lotte and SK lost their licenses without clearly being informed why, raising doubts on the procedure’s fairness.
Ahead of this Saturday’s highly anticipated downtown duty free license awards in Seoul, South Korea, Lotte Duty Free has promised to invest Won2.3 trillion ($1.97bn) on tourist-related investments in the upmarket Gangnam quarter of Seoul between 2017 to 2021.
It has also pledged to include support for small and medium-sized business partners while finding ways to attract more than 17m foreign tourists.
This unprecedented offering from South Korea’s biggest duty free operator also includes an undertaking to create 34,000 direct and indirect jobs, while creating substantial foreign exchange income.
UNPRECEDENTED SUPPORT PACKAGE FROM LOTTE
Lotte has also promised to contribute substantially to social needs, while offering ‘win-win management’ arrangements and solutions for small and medium business partners.
In a lengthy communication, Lotte Duty Free adds that all of these promises and much more are ‘included’ within the business plan it has already submitted to the Korea Customs Service on October 4.
As such, it is obviously hoping this will be enough to secure one of the Seoul downtown duty free store licenses which now comprise 10 years in length, rather than five.
SK GROUP ALSO HOPES FOR A LICENSE ‘REPRIEVE’
Needless to say, Lotte is not the only company looking to secure a downtown license since there are three on offer in the capital Seoul, with SK Networks also hopeful that it will win a license and be able to restore its duty free offer at the WalkerHill casino and hotel in Seoul.
Another three licenses are also expected to be offered to retailers operating in smaller South Korean cities, including Busan.
SK Networks (part of the SK Group) lost its Seoul license last November at the same time as Lotte Duty Free, although Lotte holds other licenses in downtown Seoul and at Incheon Airport.
Apple Korea is forecast to post improved results for the year, with its operating profit reaching more than KRW800 billion ($684 million) on revenue of KRW3 trillion.
The vendor is expected to sell 2.9 million iPhones in South Korea this year, giving it a market share of about 15 per cent, sources told the news agency. At the end of November it had sold 2.6 million iPhones.
Sales of iPhones account for more than 75 per cent of Apple’s revenue in Korea, the local sources said.
Apple launched the iPhone 7 in the country in October and has the opportunity to take share from market leader Samsung in its home country after its Galaxy Note 7 debacle. The Cupertino-based vendor is building its first flagship retail store in Seoul, which is expected to be completed in November 2017 and is located across the street from Samsung’s headquarters.
The US vendor’s market share in South Korea peaked at 33 per cent in Q4 2014 following the launch of the iPhone 6, according to Counterpoint.
Samsung and LG now have a combined market share of more than 80 per cent. LG had a 19 per cent market share in Q2.
South Korea and Japan, where the iPhone had more than a 50 per share for the three-month period ending 30 October, are rare growth markets in Asia for Apple.
iPhone shipments in China plunged 31 per cent to 7.5 million units in Q3, with Apple’s market share falling to 6.2 per cent from 10.3 per cent in Q315, according to Strategy Analytics. Earlier this month Apple reportedly reduced orders from component suppliers for its new iPhone 7 models due to weaker than expected demand in many markets, including China.
Kering CEO Francois-Henri Pinault came to Korea, Wednesday, to meet owners and CEOs of retail giants here, according to industry sources. Kering, which changed its name from PPR in 2013, is the French luxury goods holding company owner of more than 20 luxury sport and lifestyle brands including Gucci, Bottega Veneta, Saint Laurent Paris, Balenciaga, Brioni and Puma, which are sold worldwide,.
Pinault reportedly visited Hyundai Department Store in Apgujeong, southeastern Seoul, Wednesday, and was shown around by CEO Park Dong-woon. Chairman Chung Ji-sun did not meet Pinault, due to a scheduling conflict.
The sources said Pinault also met Shinsegae Department Store President Chung Yoo-kyung and Lotte Group Chairman Shin Dong-bin on Thursday.
Pinault is also reportedly scheduled to meet Hotel Shilla President Lee Bu-jin. In 2012, Pinault visited Korea as PPR chairman and met Shin and Lee. At that time, he looked around Lotte Department Store, Lotte Duty Free, Hanwha Galleria Department Store, Shinsegae Department Store and Shilla Duty Free over three days.
Observers are paying attention to Pinault’s visit, which is only a week before new duty-free store operators are named, Dec. 17. Some sources anticipate Pinault and Korean retailers will discuss offering Kering’s luxury brands at the stores.
However, candidates for duty free store cannot name what was not included in their business proposals submitted in October, during their final presentations. Other observers therefore believe Pinault’s visit is not related to duty free stores.
Those observers say Pinault was here to talk with Korean retailers, so Kering’s brands can expand their presence here and in other Asian countries, especially China.
With rapid sales growth, Asia has recently been in the limelight among global luxury brand retailers.
In April, Moet Hennessy Louis Vuitton SE (LVMH) Chairman Bernard Arnault visited Korea and met Hotel Shilla’s Lee and Shinsegae’s Chung.
Arnault also came to Korea last year for the opening celebration of The House of Dior, a flagship store in Apgujeong.
The Group of Two’s recent protectionists policies followed by Donald Trump’s victory in the U.S. presidential election and China’s economic retaliation against Korea over the deployment of a Terminal High Altitude Area Defense system seem to be serious risks for Korean exporters.
B2LiNK CEO Lee So-hyung, however, confidently said no government can interfere with macro-trends in the market. The 33-year-old is one of the co-founders of the IT-based business-to-business startup which distributes Korean beauty brands to global retail channels in the most effective way possible.
“The U.S. will not restrict small areas. It may impose anti-dumping tariffs on steel, but consumer goods ― especially Korean cosmetics ― will not be regulated as they are not in the majority of the market,” Lee said in an interview with The Korea Times on Friday.
“Most people fear that trade with China will be threatened, but local Chinese firms actually earn more money than Korean businesses through the cosmetics trade. Chinese authorities will be unlikely to regulate the trade, as most Chinese consumers purchase Korean cosmetics via their local online platforms.”
An inside view of B2LiNK office in Gangnam
After working in many industries in several countries as a consultant of McKinsey & Company for four years, Lee decided to operate a business that introduces Korean consumer goods to the world. He said, “The industry in which Korea has an advantage over other countries is in consumer goods.”
His company initially targeted the Chinese market and has expanded its presence there. The Seoul-based company established local offices in Tianjin and Shanghai. It also signed supply contracts with China’s top commerce firms including Watsons China and RuHnn.
“When I began to run my business in 2014, China’s economy was growing rapidly with its e-commerce market which was growing much faster,” Lee said. “The rate of cosmetics consumption, on the other hand, was still low at that time, so I thought there might be a chance for a success.”
However, B2LiNK is drawing up a blueprint to globally expand the presence of K-beauty beyond China. Lee said, “Korean consumer goods have depended too much on China so far, and we want to help the firms gain competitiveness in the global market. Demand for Korean consumer goods is rising in the U.S., Europe, Africa and the Middle East.”
B2LiNK began to supply Korean cosmetics to retail channels in Southeast Asia this May and posts more than 100 million won ($85,000) in monthly sales there. It plans to establish an office in the U.S. next year, which will be the company’s first base camp toward the developed market.
“We are actively recruiting employees in the U.S. and Southeast Asia,” Lee said. “We will hire local people to lead our subsidiary companies there.”
Lee said B2LiNK wants employees who can build their careers in the company, rather than those who already have experiences in similar industries. “Our basic concept is to develop less advanced industries. Expertise is an old-fashioned concept in B2LiNK,” he said.
Among young “B2LiNKers” whose average age is 29, B2LiNK posted more than 11 billion won in sales last year. The company estimates its sales will be over 30 billion won this year.
It took me a while to figure out what the big deal was. It’s not that people buy a $1.99 game, then get a refund and keep playing.It’s that people buy $100 in in-game “currency” using an in-app purchase, then get a refund, and keep the $100 of in-game “currency”. Then do this again. And again. And again.
Oh, you want to have the best fort in Clash of Clans? $100 in in-game gold, and you can do it quickly! Then get a refund on that in-game gold. Want to get good Pokemon faster? $100 in in-game gold and you can lure more Pokemon to you (for a long time.) Then get a refund on that in-game gold.
It took me a while to figure out what the big deal was.
It’s not that people buy a $1.99 game, then get a refund and keep playing.
It’s that people buy $100 in in-game “currency” using an in-app purchase, then get a refund, and keep the $100 of in-game “currency”. Then do this again. And again. And again.
Oh, you want to have the best fort in Clash of Clans? $100 in in-game gold, and you can do it quickly! Then get a refund on that in-game gold. Want to get good Pokemon faster? $100 in in-game gold and you can lure more Pokemon to you (for a long time.) Then get a refund on that in-game gold.
Not quite true. In clash of clans, if you request a refund in $100 worth of gems, the game takes the gems spent from you and you end up with thousands of gems in debt. You can still earn gems the normal way but it goes to offset that negative gem count.
Don’t know how clash of clans can do this but Koreans can’t figure out what the refund was for…
So… Commenters, we don’t need to be specifying “Korean developers” or calling them out by their nationality. This is a problem to *ALL* nationality of developers, it just happens that this article was in a Korean newspaper, so the developers they interviewed are Korean. Saying things like “These Korean developers whining about…” or “I wish these Korean companies would…” is unnecessarily adding nationality (and by proxy race) in to a complaint. Would you have made the same comment if the developers had been from California? Or Texas? Would you have specified “These Californian developers…” or “I wish these Texan companies…”?If not, then leave “Korean” off the description you post. Their “Koreanness” has nothing to do with the issue.
I hate in app purchases. I disable them from my settings.So pretty simple. Get rid of in app purchases. Than they wouldn’t have an issue tracking down people who ask for refund. One time fee payment for full game.
A non issue really. The developer has access to the receipt for each purchase and can check if it is still valid at any point in time.
They just need to keep track of the receipts, basic in-app programming ffs.
To be consistent Apple should have the same policy for their stores – so I can buy an iPhone/MacBook then call to request a refund without returning it. I’m sure there’ll only be a “small” number of people abusing it 😉
And what exactly are people “stealing” by “returning” 100 gold coins in an app – a couple bytes of database space?
I operate my own small business, a small hardware device with an online system connected – getting in on the “smart home” craze. Manufacturing is outsourced, so we don’t have to deal with manufacturing shrink, we just pay a per-unit contracted cost. The online service, as with any of these games, is practically zero cost-per-unit. If someone cancels a service, or asks for a refund (which we always offer). Yes, hardware space and bandwidth cost money, but there is no “direct cost” per-user.
Hardware-wise, in the past month, we’ve had $2388 which I’d classify as shrink at retail price, $912 at cost price. That includes:
– 1 unit damaged in warehouse
– 3 units lost by couriers shipping to customer
– 4 “change of mind” hardware returns that couldn’t be re-sold
– 1 unit that was bought via PayPal with a stolen credit card (we had to swallow the cost)
– 3 units that were returned as being faulty, which we determined was fraudulent – 1 had a smashed screen which couldn’t have happened during qa/shipping (impact mark), one which was obviously dropped and cracked but otherwise seemed to work fine, and 1 which was returned because apparently only the accessories were in the box, not the unit itself (even though we could see the unit was online, and connected to our service – not for long though!)
At cost price, for us that was around 0.9% shrink vs revenue, and around 1.4% vs per-item profit margins (not taking into account operating costs here). That’s something we have to budget for – we *know* it’s going to happen, and we take that into account. 100% of our shrink costs come from hardware, not software. Out of that, only a third of shrink was down to “fraud”.
Saying shrink can’t happen with a digital product is silly. Of course it’s going to happen. If you’re dealing with people, at some point you’re going to deal with fraud. Fact of life. The only difference is the physical cost behind it doesn’t scale the same way as with physical products.
Here’s two examples:
1. Company A sells a video streaming service for $10/month. Someone purchases a subscription uses a stolen credit card, and watches 50 films. The credit card company (rightfully) does a chargeback 14 days later, and the company cancels the service. A movie averages at 1.5GB, using 75GB bandwidth. They pay AWS $0.06/GB for bandwidth, which equates to $4.50. They also have to pay the rights holders $0.10 per viewing as part of their agreement. That’s $5, meaning that the total cost of the fraud is $9.50 – that’s $9.50 worth of shrink.
2. Company B offers a mobile video game for free on the App Store, and sells packs of “100 gold coins” for $5. When a user buys coins, they can use them to buy items in the store – the transaction is purely in the game, and the only result of buying the coins is a database entry to tell the game “hey, user X bought 100 coins”. Somebody buys 100 packs of coins for $500, buying all sorts of virtual items for their character, again, all database entries. The user claims their child accidentally bought the coins, and Apple refunds the $500. Company B hasn’t lost money, other than perhaps a couple of cent in bandwidth costs. Shrink is effectively 0.
That’s why I don’t understand them chasing so much – unless there is a physical per-unit cost behind it, it’s really not worth it. So what if someone buys a game or coins and returns them, they’ve lost a sale, sure, but they haven’t lost money.
you work for company A and i’m another customer. i don’t give a flying f*** if Fred next door can or can’t watch the latest Star Wars movie because of his fraudulent dealings with you. it literally has no material affect on the outside world.
you work for company B and i’m a customer on the same server as Fred. While you haven’t lost money, what you’ve done is enabled Fred to gain an unfair advantage over me and many others who have not bought the coins and got the stuff for free. of course, we don’t know that he hasn’t paid for them – perhaps he’s just a mr moneybags. but word gets out, the big spenders get upset that people competing with them are doing so by fraud and a ********* goes down on the game’s message boards. shrink isn’t measurable in terms of lost sales – yet – but is high in terms of lost reputation and goodwill. it could well have a material effect an order of magnitude higher than company A’s issues going forward.
comparing a video streaming service which serves one end user at a time, to a MMO game where the actions of one gamer affect the others is silly.
But you can’t *not* have a refund policy. I have, myself, gotten a refund for a game, when the game stopped working after upgrading from iOS 6 to iOS 7. The app was still installed and could still run (well, as far as it ever did after upgrading), but couldn’t be updated or re-downloaded.IMO, the amount of money they’re going to spend chasing down and suing the small % of customers who abuse it isn’t worth it. All businesses have to deal with a small % of fraud – how many retail places have had TVs returned as faulty when a new one comes out, or people had “left” their laptop in the trunk of their stolen car, or had their iPhone suddenly develop an intermittent fault just after a small scratch appears on the screen.
It’s a cost of doing business.
But you can’t *not* have a refund policy.
It’s a cost of doing business.
Very true. I wish these Korean companies would get a life and wake up. They are probably losing far more money from employee theft and laziness than a few app users.
Every business has shrink built into their monthly costs. Shrink is everything from stuff people return that they cannot get credit for, employee theft, customer theft, stuff that gets broken on the floor, etc. You have to expect these things to occur and build it into your costs.
I always assumed that Apple was able to remotely delete refunded apps.
South Korea is the next country looking to go cashless. That in itself may not surprise most people, but the way the government is going about things will raise a lot of questions. It appears the current plan is to force people to hand over all of their physical currency to the central bank. This will not happen overnight, but physical coins are expected to be out of circulation by 2020.
South Korea Will Use An Aggressive Cashless Strategy
Various countries around the world are looking at different ways to gocashlessin the coming years. Using physical cash can be a burden for both consumers and retailers, while only adding more security risks as well.0. But in most cases, the real reason for going cashless is to make people even more dependent on banks for all of their daily expenses.
Thecentral bank of South Koreais no different in that regard, as the institution unveiled its plan to enforce a cashless society over the next decade. First of all, they will eliminate all coins from circulation, which they intend to achieve by 2020. Quite an optimistic view, but then again, South Korea is a very different culture compared to most other countries in the world.
One thing to keep in mind is how the removal of coins from circulation will affect retail prices for goods and services. It is doubtful prices will be rounded down anytime soon, and more expensive goods and services are a far more likely scenario. Whether or not the South Korean population will like that change, remains to be seen.
To facilitate these changes, the Central Bank of Korea wants consumers to deposit loose changes onto the nationalT-Money cards. These electronic travel passes can be used for all forms of transportation, including taxi rides. Additionally, several thousand convenience stores in the country accept T-Money as a payment option.
It has to be said; South Korea may be one of the regions where going cashless will not be a significant change. In fact, there are more credit cards in circulation than citizens. Furthermore, only one in five payments made nationwide occurs through paper money and coins. Phasing out coins should not be a big challenge, but the goal of 2020 may be a bit too optimistic.
But it appears there is another reason to get rid of physical coins. Credit Finance Institute’s Lee Hyo-Chan toldCNBChow it costs more than 10 won to create a 10 won coin. All of the costs associated with the mass minting of coins adds up to over US$40m per year. Additionally, collecting, managing, and circulation of coins incurs, even more, costs.
Getting rid of cash is a cost-cutting effort, which is understandable. At the same time, banks should not be given even more power of the financial ecosystem than they have right now, as they already have a firm grip on people’s money. Centralization of financial power is never the answer, and going cashless will not necessarily be beneficial to the average consumer from a financial perspective.
South Korea said on Tuesday it plans to disallow sales of two Nissan Motor Co Ltd, one BMW AG and three Porsche AG car models after finding errors in certification documents for the car makers’ imported models.
South Korea’s environment ministry said in a statement it also plans to fine the local units of the foreign car makers a combined 6.5 billion won ($5.56 million) after finding certification errors in two Nissan, one BMW and seven Porsche models.
Out of the seven Porsche models, four have discontinued sales, the ministry said.
The decisions on the sales halt and fines will be finalised in December after a hearing, the environment ministry said.
The ministry announced the results of a probe into whether foreign car makers besides Volkswagen AG falsified documents for certification, following a similar finding on Volkswagen earlier this year.
A Nissan Korea spokesman said the company plans to cooperate with the environment ministry and clarify its position in the hearing.
Spokespersons for BMW and Porsche could not be immediately reached for comment.
In order to recover their profit lost due to Galaxy Note 7 issues, Samsung decided to launch the Galaxy On7 in South Korea. The phone is 55-inch and is packed with 3GB Ram and a 16GB memory. It is metal framed and comes with an 8-megapixel front camera and 13-megapixel back camera.
The Samsung Galaxy On7 is available in two different colors of Black and Gold. It is priced at 399,000 won, which is more or less $399. The phone is available with features similar to its flagship models, like the F1.0 aperture that allows filming even on a low light setting. It is also available with fingerprint recognition and many more.
It should be remembered that the Galaxy On5and the Galaxy On7 were launched last year in India, but they were restricted in most South Asian countries. On the other hand, the Galaxy On7 is going global after it was launched in China last September and India just last month.
When it comes to features, the Galaxy On7 does not disappoint. It comes with 5.5-inch touchscreen display and in 1920 x 1080 pixels. The one that was launched in South Korea is available with a 1.6GHz processor, while the Indian and Chinese versions come with Snapdragon 625 chips.
When it comes to its camera feature, the phone can take impressive selfies as well as video chats. Both front and back cameras come with f/1.9 apertures. The Galaxy On7 runs in Android 6.0.1 Marshmallow and operates with 4G LTE connectivity. It also comes with a metal body that never fails to add a touch of class.
LG and Apple, the two known rivals of Samsung, were able to experience great sales in South Korea with their models V20 and iPhone 7 respectively. The said boost of sales is blamed to the Note 7 dilemma.But with the coming of the Galaxy On7, Samsung hopes it can make up for the loss profit.
Teslarati reported on November 28 that Tesla Motors is all-set to open its first showroom inside South Korea’s largest shopping mall, the Starfield Hanam Complex. The store is expected to open today. However, the news didn’t do much to the stock as TSLA declined 0.41% during after-hours trading on Monday.
The company’s latest store in Gyeonggi Province would be its first retail outlet in South Korea. With its entry, Tesla may provide tough competition to the region’s largest automaker; Hyundai Motor. The latter is also expected to open a store in Starfield. Moreover, the company is expected to launch its competitively priced Electric Vehicle (EV) before the year-end.
Moreover, executives of Starfield Hanam indicated that they were notified about the store’s opening date. However, they believe that the date may be delayed, depending on the company’s preparations.
Teslarati reported: “While the Silicon Valley-based automaker takes aim at expanding its retail presence in South Korea, the company is also busy with laying the ground work for the build out of its Supercharger network across the country.” The company is also reportedly viewing its plans of building supercharging stations around Seoul.
The report further mentioned that TSLA has also invested in constructing another showroom within the country’s high-end Gangnam district. The district is also considered as the Rodeo Drive of South Korea. Earlier in September, the company had signed a $439,059 lease to get its hands on a three-story upscale commercial building in the district. The store is expected to be surrounded by Ferrari, Lamborghini, and Bentley showrooms. Moreover, neighboring stores will also include Cartier, Dior, and Hermes.
Wall Street analysts have assigned a PT of $225.13 with a 14.8% upside over the last closing price. Analysts’ ratings include 3 Buy, 1 Overweight, 9 Hold, two Underweight, and four Sell.
Kim Bum Ho, Deputy Executive Director of IIAC’s Commercial Marketing Group, said this morning that although Incheon Airport has planned to issue its T2 tender on schedule [in the first week of December], there could be a delay if the debate surrounding a change in e-commerce regulation – among a few other issues – continues.
Operators at South Korea’s Incheon International Airport (ICN) are currently not permitted to offer online duty free shopping due to regulation that stipulates that downtown DF operators alone command this privilege.
But Kim is all too aware of the increasing importance of e-commerce in South Korea, confirming that online sales growth continues to soar. “In South Korea the increased rate of online duty free shopping is now almost 50%-60% year-on-year…it’s so huge.”
Kim says that many local residents now prefer to only shop online. “So if you go to the downtown duty free store at this hour (evening in South Korea) you will only see Chinese people; no Koreans, no local people. Local people like to shop online. It’s such a big trend.”
In order to attract the most competitive bids (and retailers), Kim is trying to get the current e-commerce regulation for airport duty free operators changed…but it’s not been easy.
A large jewellery and watches counter at Incheon
“The duty free sales do not match the passenger growth rate unfortunately, but we think at this moment the duty free business has increased by 15% compared to last year,” says Kim.
“We are now talking…it is one of the issues we need to talk with the government about…So we are trying to [eliminate] the barriers to have e-commerce for airport duty free operators. I do think we can solve the problem for T2 operators…We have officially asked the Korean Customs office to permit the e-commerce business for airport duty free operators.”
Kim reveals that IIAC should find out if this is possible in two weeks time. In fact, he plans to write this into the terms of the T2 tender, if negotiations with the Korean Customs Service (KCS) go to plan.
TERMINAL 2 TERMS
“I think it will be determined in two weeks. It’s one of the conditions for the bidding. So yes we are planning to open the tender in early December, but we have to negotiate with the Korean Government Customs office before it opens…if it is takes longer we’ll need more weeks before we open. Anyway, our target date is early in December.”
Kim confirms that most local Korean operators such as Lotte, Shilla, Shinsegae, Hanwha and Doosan are interested in the Terminal 2 tender. Regarding the international operators he admits that two have already approached him, but he cannot reveal the company names at this stage.
T2 TO OPEN IN LATE 2017
Of course once the results have been announced, the retailers can begin to fit out the stores ready to commence trading in late 2017 when the new $5bn terminal opens.
“T2 will be opened late in 2017,” confirms Kim. “We spent almost $5bn on constructing it. It’s a totally new and unique place…we have centralised the duty free shops more…and it will be a more market and customer-oriented place. We can provide a good business environment.”
This year Incheon Airport says it has witnessed a very healthy increase in passengers of around 19%, however unfortunately duty free sales have not kept pace, as Kim concedes.
“The duty free sales do not match the passenger growth rate unfortunately, but we think at this moment the duty free business has increased by 15% compared to last year.”
Of course, Kim says that it’s difficult to make a direct comparison with last year, as the airport and the whole country suffered from the impact of MERS.
“It’s not best to compare directly with last year, but when we compare with two years ago (2014) we had about 10% increase in duty free sales.”
This year Incheon Airport says it has witnessed a very healthy increase in passengers of around 19%.
$2BN SALES TARGET STILL IN SIGHT
Kim also strongly believes that the airport can still achieve the $2bn sales total it predicted earlier this year. “We can hit $2bn again. Last year in 2015, we couldn’t because of the MERS…but this year in 2016 I think we can hit $2bn again.”
As the world’s biggest duty free market, many are interested to see what sort of sales South Korea can register in 2016. As reported, duty free sales rose +36% to $7.9bn in the first nine months of this year.
Kim gave us his updated forecast this morning: “I think the duty free business can hit about $9bn or $10bn in South Korea this year, so there is amazing growth actually.”
However, Kim also admits that for the last few months – maybe even as early as April this year – the growth in the number of Chinese inbound visitors has decreased, for which Kim says ‘there are many reasons’.
CHINESE INBOUND GROWTH SLOWS
One of these could be the new luxury goods import tax introduced by the Chinese Government earlier this year in a bid to protect home-grown businesses. Of course political tension could also be a factor.
[There were earlier concerns that the South Korean Government’s plan to plug into the US’ Terminal High-Altitude Air Defence (THAAD) system by the end of 2017 might cause a drop off in Chinese visitors, considering Beijing’s stiff opposition to the deployment].
LOTTE WILL BID AGGRESIVELY
“Duty free operators, including Lotte and Shilla are worrying about the Chinese changes…they spend less and they visit less.”
Kim believes this is more of a problem for the downtown duty free business and maintains that ‘the airport business is very stable compared to the downtown business’.
“Incheon is the gateway to South Korea and almost all the Chinese visitors have to come through Incheon Airport. It’s the national gateway…so it’s very stable, though their spending per passenger is now decreasing.”
The U.S.-based electric carmaker Tesla Motors will open its first Korean showroom at the Starfield Hanam shopping mall in Gyeonggi Province, Nov. 29.
A Starfield Hanam official said he received an in-house notice of the Tesla showroom opening date.
“However, the opening date may be moved up or delayed depending on Tesla’s preparations,” he added.
Starfield Hanam, which had its grand opening on Sept. 9, is the largest shopping complex in Korea built as a joint venture between retail giant Shinsegae and U.S.-based shopping mall management company Taubman’s regional affiliate Taubman Asia.
Before the grand opening, Tesla said Aug. 31 in a press release it would open its first Korean showroom on the second floor of the mall.
The showroom is currently under construction, covered with a screen to hide the interior. However, Tesla has reportedly completed the ground construction for a charging station on the mall’s second-floor parking lot.
The showroom will present Tesla’s Model S 90D, a full-size all-electric five-door luxury sedan.
When the model was introduced in 2012, it received a perfect 5.0 from the U.S. National Highway Traffic Safety Administration (NHTSA) car safety rating. The U.S. Environmental Protection Agency (EPA) official range for the 2012 Model S equipped with an 85kWh battery pack is 426 kilometers.
Tesla’s official webpage said the current Model S 90D’s range is 512 kilometers.
Tesla has already received approval for emissions and noise standards from the Ministry of Environment, and is preparing for another approval with the Ministry of Land, Infrastructure and Transport (MOLIT). It is expected to take about two weeks to get MOLIT approval.
Tesla is also preparing to open its second Korean showroom in Gangnam, southern Seoul.
It reportedly signed a lease to rent a building in Cheongdam-dong on Sept. 1. It will use the building’s basement, first and second floors until Aug. 31, 2021.
The Gangnam showroom is also currently under construction and Tesla officials visited the site last week to monitor the construction process.
Tesla also announced last week via an email interview with ZDNet Korea, an IT-focused online newspaper, its plan to establish charging infrastructure in Korea.
“Tesla is reviewing its plan to build a few supercharging stations in Seoul,” Atsuko Doi, Tesla’s head of communications for Asia Pacific, was quoted as saying.
“We are discussing how to rent the sites for the charging stations.”
U.S. sports brand Under Armour said Thursday that it has opened an office in Korea to operate its business directly next year. So far, its clothes, shoes and sports equipment have been imported, marketed and sold through business partner Hyosung Galaxia.
The company said it decided to bring its products directly to Korean consumers as the country’s sports and fitness market continues to grow.
“Under Armour will strengthen its marketing, distribution and retail efforts, providing Korean consumers with the best brand and shopping experience,” said David Song, country manager of Under Armour Korea. “We will open our flagship store in southern Seoul in January. The brand will also continue to connect with athletes directly and promote sports, fitness and healthy living through its connected fitness platform, which is the world’s largest digital health and fitness community.”
Song said driving deeper growth in Korea is a pivotal component of the firm’s comprehensive international growth strategy. “Through design, innovation and our Under Armour connected fitness platform, we look forward to forging long-term relationships directly with athletes at every level in the country.”
Under Armour Korea plans to open premiere retail shops and carry out robust marketing campaigns to tell its unique brand story, as well as invest in the next generation of Korean athletes to exemplify its brand.
