Duty-Free Shops Finally Stretch Out After Opening New Stores for the First Time in 683 Days

Lotte Duty Free to Open New Downtown Duty-Free Store in Sydney, Australia on the 5th
Focusing on Cosmetics, Liquor, Watches, and Price Competitiveness... Aiming for 1 Trillion KRW Sales Over 10 Years
Resuming Overseas Duty-Free Stores Closed Due to COVID-19: "Expecting 250 Billion KRW Overseas Sales This Year"
Shilla Duty Free Launches Industry-First 'Mobile Queue Ticketing Service for Duty-Free Goods Pickup Area'
"Reopening Period Sparks Full-Scale Competition to Secure Domestic and International Markets"

Lotte Duty Free Sydney City Store Exterior.

[Asia Economy Reporter Kim Yuri] The duty-free industry is actively resuming major domestic and international projects, including restarting overseas new store openings that were postponed due to COVID-19. In line with the reopening atmosphere, the industry is aiming to secure market share in overseas markets while also focusing on extending operating hours and enhancing services at domestic duty-free stores in response to the increase in outbound travel by Korean nationals.

According to the duty-free industry on the 3rd, Lotte Duty Free will open a new downtown duty-free store in Sydney, Australia, on the 5th. New store openings, which had nearly halted since the opening of the Singapore Changi Airport store in June 2020 due to the prolonged COVID-19 situation, have resumed after 683 days.

The Sydney downtown store, located in the central business district, spans three floors with a total area of approximately 3,000㎡ (907 pyeong) and houses about 150 brands across categories such as cosmetics, perfumes, liquor, watches, and jewelry. After acquiring five duty-free stores in Australia and New Zealand from JR Duty Free in August 2018, Lotte Duty Free entered the Oceania market for the first time among domestic duty-free operators in January 2019, and this marks its first new store in the Oceania region. Cosmetics will be competitively priced about 15% cheaper on average compared to local retail prices in Australia, and liquor and watches will be marketed targeting Australian and New Zealand locals. The goal is to achieve sales of 1 trillion KRW over the next 10 years.

The Australian duty-free market size was about 1 trillion KRW annually before COVID-19. Competition is fierce among global duty-free operators such as Lotte Duty Free, Dufry, DFS, and Heinemann. Lotte Duty Free plans to leverage the Sydney downtown store as a stepping stone to become the largest duty-free operator in Australia.

Lotte Duty Free, which temporarily closed all overseas stores due to COVID-19, has resumed operations at all stores except for the temporarily closed Nha Trang Cam Ranh Airport store in Vietnam due to airport shutdowns. From January to April this year, Lotte Duty Free’s overseas sales increased by nearly 140% compared to the same period last year. Lotte Duty Free aims to achieve 250 billion KRW in overseas sales this year by strengthening existing overseas stores and opening new stores such as the Danang downtown store in Vietnam. A new store opening in Hanoi downtown, Vietnam, is also planned for next year.

With overseas travel becoming more active, the duty-free industry has also begun aggressive marketing targeting Korean nationals starting this month. Shilla Duty Free, in collaboration with Incheon International Airport Corporation, launched the industry’s first “Mobile Queue Ticketing Service for Duty-Free Product Pickup” from today. This service allows customers who need to pick up duty-free products at the pickup counter to check the waiting queue and issue queue tickets via the Shilla Duty Free mobile application. It is expected to reduce customer waiting times and alleviate congestion at the pickup counter. Shilla Duty Free also started a prize draw event offering up to 1 million S Rewards points (equivalent to about 1.2 million KRW) to customers who made purchases. The Seoul store’s operating hours were extended by one hour starting from the 30th of last month. Shinsegae Duty Free is conducting a major store renovation this month following a revamp of its beauty stores. It is reopening popular duty-free categories such as electronics, character goods, and food stores that had been closed for the past two years, and newly organizing stores for food and health supplements.

According to the Korea Duty Free Association, domestic duty-free sales in March reached 1.6629 trillion KRW, a 16.46% improvement compared to the previous month’s 1.4279 trillion KRW. Duty-free sales, which had dropped to the 1.1 trillion KRW level due to the lockdowns in China related to the 2022 Beijing Winter Olympics in January, have recovered to the 1.6 trillion KRW level. An industry insider said, “The duty-free industry, which had been more contracted than any other sector due to COVID-19, is now stretching out for full recovery in line with the reopening trend. Competition to secure market share will also intensify as cross-border movements become as active as before.”

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