Endemic's First Spring, Retail Sector Energized by 'Returning Foreigners'

Expansion of Overseas Travel... Increase in Foreign Visitors to Department Stores and Outlets
Resumption of Chinese Group Tours Expected to Offset Concerns of COVID-19 Rebound

After the spread of the endemic (periodic outbreak of infectious diseases) atmosphere, the spring season has arrived, and the distribution industry has once again taken out its strategy to expand overseas customers, which had been halted due to COVID-19. As air routes have fully reopened, the industry is targeting foreign tourists visiting Korea by strengthening shopping benefits and expanding experiential content. The industry expects that inbound sales (foreigners traveling domestically), especially from China amid concerns of an economic downturn this year, will have a significant impact on the distribution sector's performance, and is therefore intensifying these efforts.

On the 21st, foreign visitors were shopping at Hyundai Premium Outlet Gimpo branch in Gimpo-si, Gyeonggi-do.
[Photo by Hyundai Department Store].

According to the distribution industry on the 28th, as international travel has become more active this year, the number of foreign tourists visiting domestic department stores has also increased significantly. Foreign sales at Lotte Department Store’s Main Branch and Jamsil Branch surged by 650% and 410%, respectively, in January and February, and this trend continues this month. This increase is mainly driven by luxury goods and overseas fashion sales. Shinsegae Department Store’s Main Branch also saw foreign sales rise by 310.4% during the same period compared to last year. Following the gradual increase in individual tourists after the endemic, group tourists from nearby countries such as Japan and Hong Kong, as well as Southeast Asian countries like Thailand and Vietnam, have also increased.

These department stores are each connected to major downtown duty-free shops such as Lotte Duty Free Myeongdong Main Branch, Lotte Duty Free World Tower Branch, and Shinsegae Duty Free Main Branch, creating a synergy effect in foreign tourist sales. Foreign tourists who visit duty-free shops for duty-free shopping then proceed to the connected department stores for additional shopping in various categories such as luxury goods, fashion, and sports, and receive post-tax refunds. Accordingly, department stores are actively promoting promotions such as gift certificates worth 5-7% based on purchase amounts and product categories for foreign customers, attracting more foreign visitors.

Suburban outlets in the metropolitan area have also seen a significant increase in foreign shoppers. In January and February, the number of foreign visitors to Hyundai Premium Outlets in the metropolitan area increased sixfold compared to the same period last year, reaching a record high of 100,000. This figure is about 15% higher than the January-February period in 2019, before COVID-19. On the 21st, around 350 group tourists from Thailand visited Hyundai Premium Outlet Gimpo Branch to enjoy shopping and sightseeing. The geographical advantage of being close to Seoul, airports, and ports, along with rich content such as culture and tourism beyond shopping, are cited as strengths. A Hyundai Department Store official said, "The number of foreign tourists visiting Hyundai Premium Outlet Songdo Branch through the recently resumed Incheon Port cruise has also increased," adding, "We have completed preparations to welcome foreign customers by installing kiosks that provide surrounding tourist information and exchange rates in cooperation with the Incheon Tourism Organization." The Gimpo Branch is also considering installing a lounge exclusively for foreign customers.

According to the Korea Tourism Organization, the number of tourists entering Korea this year showed a recovery trend with 434,429 in January and 479,248 in February. The distribution industry expects foreign sales to expand in earnest after China, which includes Korea among the countries allowed for group tours, improves the visitation of Chinese tourists. An industry official said, "Before COVID-19, the average spending per Chinese customer reached 3 million KRW," adding, "We expect that big-spending Chinese shoppers, especially focusing on luxury goods, will increase again within this year."

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