Shinsegae Duty Free Partners with Cathay, 'Targeting' Global Tourists

Global Airline Cathay and Marketing Partnership Agreement
Aiming to Provide Differentiated Customer Experience through Ecosystem Expansion
Targeting Individual Foreign Tourists Amid Changes in Duty-Free Market

"Expanding the ecosystem to provide customers with diverse experiences is a key factor for business success. The partnership with Cathay Pacific (Cathay) is significant as it marks the first step in establishing customer touchpoints."

On the 19th, Yushin-yeol, CEO of Shinsegae DF (duty-free shop), made these remarks while attending a business agreement ceremony with the airline Cathay Pacific held at the Westin Chosun Hotel in Seoul. The plan is to build an ecosystem that can capture the era of individual tourists through the alliance with Cathay Pacific, one of the world's top 10 airlines. CEO Yu added, "We will actively pursue partnerships that can expand customer experiences through collaboration with various hotels that have global chains." Shinsegae Duty Free aims to create a virtuous cycle structure leading to an increase in duty-free customers, more partners, enhanced benefits, and higher customer satisfaction through ecosystem expansion.

The CEO of Shinsegae DF held a business agreement ceremony with the airline Cathay at the Westin Chosun Hotel in Seoul on the 19th.
[Photo by Minji Lee]

Cathay Pacific is Hong Kong's largest airline with approximately 10 million active members. Recently, based on its mileage program 'Asia Miles,' it has been evolving beyond a simple airline into a premium travel and lifestyle brand composed of complementary categories such as shopping, dining, and wellness.

The reason Shinsegae Duty Free partnered with Cathay Pacific lies in the rapid changes in the duty-free market. After COVID-19, as countries cautiously reopened their borders, the proportion of individual travel significantly increased compared to before. According to a survey by the Korea Culture and Tourism Institute, the share of individual travelers among foreigners rose from 77.1% in 2019 to 85% by the third quarter of this year, while group travel decreased from 15.1% in 2019 to 9.2%.

The purpose of travel centered on shopping has also changed. There has been an increase in trips for food tourism, natural scenery, visiting historic sites, and filming locations, indicating that travelers increasingly value experiences and activities.

This agreement aligns with CEO Yu's key business focus for next year, which is to capture the individual tourist market. Since the COVID-19 pandemic, due to China's economic slowdown, sales from China have not recovered, prompting a shift toward individual tourists. He explained, "I thought we could not wait until China normalized, so I considered whether to secure customers through individual Free Trade Agreements (FTA) or design MD content. We will actively embrace the paradigm shift centered on individual tourists and evolve into a more advanced duty-free shop." Shinsegae Duty Free expects this partnership to generate over $16 million in annual sales and aims to increase the number of individual tourists using its duty-free shops by 30% next year compared to this year.

Preparations to attract individual customers are already complete. Shinsegae Duty Free has allowed VIP customers to enjoy VIP benefits at department stores as well, and continues art management connecting art and shopping by hosting various exhibitions.

Looking at the direct benefits, starting February 2024, the 16 million members using Cathay Pacific will be offered Asia Miles partnership services and benefits. When Cathay Pacific members purchase duty-free products at Shinsegae Duty Free, they will receive Asia Miles accrual and shopping benefits. One Asia Mile is earned per 1,000 KRW spent, and an additional 250 Asia Miles are credited for purchases over 300,000 KRW. The accumulated Asia Miles can be used not only for airline tickets but also at approximately 90,000 locations of about 800 partner companies worldwide. Additionally, Cathay Pacific members will receive special discounts worth about 340,000 KRW, including shopping support funds and various coupons in the form of E-vouchers usable at Shinsegae Duty Free. On the Cathay Pacific online shop, Shinsegae Duty Free prepaid cards can also be purchased with airline miles.

CEO Yu said, "This business agreement with Cathay Pacific is expected to be a successful starting point for Shinsegae Duty Free's global expansion," adding, "As a leading company in the duty-free industry, Shinsegae Duty Free will continue to pursue new and challenging initiatives."

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