Fashion
Korean travel retailer Walkerhill Duty Free has outlined the importance of Chinese consumers to overall business while presenting an overview of the leading brands, which have driven growth in Korean Duty Free.
Speaking as part of a morning workshop last week in Cannes, which focused on South Korea, the world’s largest single travel-retail and duty-free market, which registered sales growth of 22.8% last year giving it a global market share of 12.3%, SK Walkerhill Duty Free senior vice-president Mikyong Kwon said: “Eighty percent of our customers are Chinese. Our brand loyalty is very high built up over 50 years. There is a strong emphasis on Chinese customers.”
She added: “Walkerhill Duty Free grew 46% in 2013 compared to the previous year and the majority of our customers were Chinese.”
Pressed by the audience as to whether the retailer relies too much on Chinese customers, she commented: “It is our role to cater to Chinese consumers. There was a time when we dependant on Japanese customers.”
In terms of brands, total cosmetics sales in Korean travel-retail grew 38% in 2014 versus the previous year. “We have seen outstanding growth of Korean brands in sales and market share. Sulwahsoo, Laneige and Etude House are enjoying accelerated growth.
“For Walkerhill, number one is WHOO from LG then MCM, Sulwahsoo and Laneige.”
She added: “I would like to draw your attention to these Korean brands which are leading the sales growth of Korean duty-free. There is still room for growth in the next five or 10 years.”
Meanwhile, Kwon is remaining positive despite the Middle East Respiratory Syndrome (MERS) outbreak from May to July, which stunted growth. Kwon said: “Although growth has slowed because we hit by MERS we should still reach last year’s sales figure.”
Regarding Walkerhill’s online and mobile strategy Kwon said online and mobile was definitely the direction to go. “Fifty percent of Koreans are shopping online before departure,” she commented.
Kwon’s presentation followed a speech from Silla University Professor Yang Song-Hoon, who emphasised the importance of Chinese consumers. “In 2014 there were 6.1 million Chinese tourists in Korea. They are our biggest customer and comprise 40% of total visitors. Their expenditure is double compared to other tourists.”
According to Song-Hoon, who said facial mask-packs were the hottest items purchased by inbound Chinese travellers in Korea, souvenirs are important purchases for Asian consumers. He explained: “Asian tourists have a duty to express their apologies to family and friends that did not accompany them on their trip. Tangible souvenirs are a means of expressing thanks.”
Reflecting on this year’s MERS outbreak, Song-Hoon said: “Korea learnt an expensive lesson from MERS outbreak. To rebound from the adverse effect of MERS our government took measures to return to normal. It committed public money including a tourism fund.”
