"Duty-Free Shops Stretch Out with Group Buses After 2 Years, Mixed Expectations and Concerns"

Group Tourists Visit for the First Time in 2 Years Since COVID-19
150 Malaysian Group Tourists Visit Lotte Duty Free Main Store on the 7th
Shilla Duty Free Jeju Airport Branch Reopens After 2 Years, Thai Group Shopping at Jeju Branch
"Domestic and International Travel in Full Swing → Time Needed for Performance Improvement"
Industry Hopes for Extension of Incheon Airport Rent Support

On the 4th, a delegation of Vietnamese travel agency representatives visited the Shilla Duty Free Seoul branch in Jung-gu, Seoul, and took a commemorative photo.

The domestic duty-free industry, which had been dormant, is now stretching out. After two years since COVID-19, group tourists have started arriving, and both domestic and international individual tourists are showing signs of increase, leading to a busy preparation for welcoming customers. However, the industry agrees that it will take time for these movements to fully materialize into actual performance.

According to the duty-free industry on the 7th, about 150 Malaysian group tourists visited Lotte Duty Free Myeongdong Main Store that day. These visitors, who came on an incentive tour provided by their company to employees, entered through Incheon International Airport on the 4th, enjoyed a 4-night, 5-day domestic tour, and visited Lotte Duty Free before departure. This is the first time since the COVID-19 outbreak in 2020 that an incentive group of over 100 people has visited a domestic duty-free store. Lotte Duty Free Myeongdong Main Store has prepared for reopening by installing three additional elevators exclusively for duty-free customers. A Lotte Duty Free official said, "This month, group customers from Thailand and the Philippines are scheduled to visit Lotte Duty Free, and we are preparing to attract groups numbering in the thousands in the second half of the year."

Earlier, on the 6th, about 170 Thai group tourists visited Lotte Duty Free and Shilla Duty Free Jeju Store to enjoy duty-free shopping. These tourists came to Jeju following the resumption of international flights between Jeju and Bangkok. Shilla Duty Free reopened its Jeju International Airport store on the 2nd after 2 years and 2 months and started welcoming customers. A delegation of travel agency representatives, who develop Korean tourism products and send local tourists to Korea, are also visiting consecutively this month from the Philippines, Vietnam, and other countries. Shilla Duty Free plans to reorganize its product lineup and enhance various shopping conveniences, including providing interpretation support. Shinsegae Duty Free has also been welcoming overseas incentive tourists since last month and is securing customers by continuing live broadcasts in collaboration with popular Chinese influencers at its main store’s ‘The Beauty Live’ shop.

The duty-free industry is hopeful for a recovery in business conditions as Jeju’s visa-free entry system was allowed this month and, starting from the 8th, quarantine requirements for overseas arrivals were lifted according to government guidelines. However, since the atmosphere has just begun to change, they believe time is needed for performance to become visible. Another obstacle is that sales heavily depend on Chinese daigou (personal shoppers), causing significant sales fluctuations depending on their activity. Despite the recovery of individual travelers in April, domestic duty-free sales dropped again to 1.3833 trillion KRW from 1.6629 trillion KRW in March, largely due to the lockdown in Shanghai, China.

Having experienced over two years of COVID-19, there is also a sense of crisis that the business environment is different from before. Domestic duty-free sales plummeted from 24.8586 trillion KRW in 2019, just before COVID-19, to 15.5052 trillion KRW in 2020, which was hit hard by the pandemic. This year, the average monthly sales remain at about 1.4 trillion KRW. In this situation, the industry, which has adopted a ‘selection and concentration’ approach to operating duty-free stores, did not participate in any of the new bids for downtown Seoul duty-free stores targeting large corporations at the end of last month.

An industry official said, "Although duty-free stores are showing signs of vitality after a long time, it will take time for this situation to fully develop and lead to improved performance. The industry is looking forward to the extension of rent support measures for duty-free stores at Incheon International Airport and improvements in the rent calculation method for the second half of the year’s Incheon Airport duty-free store bids."

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