Duty-free sales climb 36% in Korea so far in 2016
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Duty-free sales from South Korea’s retailers increased 36.4% year-on-year to W8.9trn ($7.9bn) in the first nine months of 2016, according to local media reports. This is compared with W6.55trn a year ago.
Sales growth in particular is driven by the rise in foreign tourists, with Chinese travellers comprising nearly 43% of all travellers. Chinese spend per passengers reached a total of $350, while Koreans spent $106, according to The Korea Times.
According to the publication, despite the increase in sales many retailers in the country are facing deficits, with the exception of Lotte Duty Free and The Shilla Duty Free, which reportedly saw profits totalling W232bn and W38bn in the first half the year, respectively.
Galleria Duty Free Shop of Hanwha was reported to have suffered a W17bn loss, while Doosan’s Doota Duty Free saw a W16bn loss for the same period.
Despite this, there is still room for optimism, with potential for annual duty-free sales to top W10trn by the end of the year. Retail real-estate developments such as Hanwha Galleria’s launch of the Galleria Duty Free 63 store in July, and buoyant figures reported by retailers like Shinsegae, add to the country’s potential for a possible positive rebound.
Questions & Answers
Q.What was the total value of duty-free sales in South Korea during the first nine months of 2016?
What was the total value of duty-free sales in South Korea during the first nine months of 2016?
Duty-free sales reached W8.9trn ($7.9bn) in the first nine months of 2016. This figure represents a 36.4% increase compared to W6.55trn recorded a year prior.
Q.Which specific groups of travellers are primarily driving the growth in duty-free sales?
Which specific groups of travellers are primarily driving the growth in duty-free sales?
The rise in foreign tourists is driving sales growth, with Chinese travellers making up nearly 43% of all travellers. Chinese passengers spent an average of $350 each.
Q.Despite the increase in sales, are all retailers in South Korea profitable?
Despite the increase in sales, are all retailers in South Korea profitable?
No, many retailers are facing deficits despite the sales increase. For example, Galleria Duty Free Shop suffered a W17bn loss, and Doota Duty Free saw a W16bn loss.
Q.Which duty-free retailers were reported to be profitable during the first half of the year?
Which duty-free retailers were reported to be profitable during the first half of the year?
Lotte Duty Free and The Shilla Duty Free were the exceptions among retailers, reportedly seeing profits. Their profits totalled W232bn and W38bn respectively in the first half of the year.
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