"Cosmetics Unavailable at Duty-Free Shops, Up to 30% Discount at Department Stores"

Lotte Department Store's Largest Ever Promotion
10% Cash Discount, 10% Gift Certificates, 5-10% Benefits by Brand
An Opportunity to Revitalize the Entire Distribution and Manufacturing Industry

[Asia Economy Reporter Lim Hye-sun] Lotte Department Store is holding a large-scale cosmetics discount event during the golden holiday period.

Lotte Department Store announced on the 28th that it will hold a cosmetic fair featuring 40 cosmetics brands at all its stores from the 30th to the 5th of next month. This event is the largest ever, with discounts ranging from 25% to 32% depending on the brand.

Lotte Department Store has prepared three types of promotions. The department store offers a 10% cash discount and a 10% gift certificate based on the purchase amount. Each brand provides an additional 5% to 10% gift certificate and extra brand mileage points. Assuming a consumer purchases 660,000 KRW worth of cosmetics from the brand Lanc?me using a Lotte Card, the department store gives a 10% cash discount of 60,000 KRW and a 60,000 KRW gift certificate. The cosmetics brand additionally provides a gift certificate worth about 60,000 KRW, approximately 10% of the purchase amount, and extra brand mileage points. If purchased with L.PAY, 2% of 600,000 KRW is accumulated as points. This means purchasing 660,000 KRW worth of cosmetics for about 470,000 KRW.

The department store planned the cosmetics discount event to stimulate domestic consumption. According to Lotte Department Store, monthly sales of cosmetics categories over the past three months decreased by 24%, 37%, and 22%, respectively, compared to the same period last year. This decline is attributed to social distancing and mask-wearing reducing demand for cosmetics. As the spread of COVID-19 enters a stable phase, the department store expects cosmetics consumption to increase as a form of compensation for suppressed lifestyles.

In particular, changes in consumer patterns purchasing at duty-free shops are expected to create pent-up demand for cosmetics purchases in the domestic market. Last month, the number of domestic travelers departing was 140,000, a 93.9% decrease compared to March 2019. Analyzing the items purchased at domestic duty-free shops during overseas travel shows that cosmetics sales total 11 trillion KRW, the largest share. Domestic consumers account for 20.9% of total duty-free sales, estimating domestic cosmetics purchases at 2.3 trillion KRW.

Hyun Jong-hyuk, head of marketing at Lotte Department Store, said, "Domestic companies are facing a severe demand cliff due to COVID-19," adding, "We hope this cosmetics discount event will stimulate consumption at department stores and serve as a catalyst for domestic recovery, revitalizing not only the distribution industry but also manufacturing as a whole."

This content was produced with the assistance of AI translation services.