"Thank You, BTS"... Three Major Department Stores’ Distinct Strategies for Surging Foreign Customers

Lotte, Shinsegae, and Hyundai See Rising Share of Foreign Sales in Q1

Growth in Total Revenue and Operating Profit Driven by Tourism

K-Content Craze Expands to Consumer Spending

Targeted Demand with Dedicated Teams and Membership Programs

As the global popularity of K-content continues to rise, the number of foreign tourists visiting Korea has increased, accelerating growth for the department store industry this year.

According to the Financial Supervisory Service's electronic disclosure system on May 12, Lotte Department Store recorded sales of 872.3 billion won in the first quarter of this year, up 8.2% compared to the same period last year, while operating profit surged by 47.1% to 191.2 billion won.

The main driver behind this performance rebound was foreign tourists. At Lotte Department Store's flagship store, Jamsil store, and Busan flagship store, sales from foreign tourists jumped by 92% compared to the same period last year. Notably, foreign sales at the flagship store more than doubled, rising 103% year-on-year, and the share of foreign sales increased by 6 percentage points, from 17% last year to 23%.

Foreign group tourists are moving through the arrival hall of Incheon International Airport under the guidance of a tour guide. Photo by Yonhap News Agency

Shinsegae Department Store also saw first-quarter foreign sales at its flagship store soar by 141% year-on-year, with the proportion of foreign sales reaching 28.4% of total sales across all stores, up 11.1 percentage points from a year earlier. This growth led to an overall improvement in the company’s performance: the department store business posted sales of 740.9 billion won for the first quarter, up 12.4% from a year earlier, and operating profit was 141 billion won, up 30.7%.

Hyundai Department Store also showed robust growth, with foreign sales at The Hyundai Seoul up 121% from the same period last year, expanding the share of foreign sales to about 20% of the total. As a result, Hyundai Department Store’s net sales in the department store division hit an all-time first-quarter high of 632.5 billion won, up 7.4% year-on-year, while operating profit increased by 39.7% to 135.8 billion won.

Foreign sales at Korea’s three major department stores have been on the rise as the popularity of K-pop and other K-content has fueled strong interest among foreign visitors to Korea. Last year, annual foreign sales at Lotte Department Store reached 734.8 billion won, up 28.5% from the previous year. During the same period, Shinsegae Department Store’s foreign sales rose to 650 billion won, an increase of 52.9%. Hyundai Department Store recorded approximately 700 billion won in foreign sales, up 25% year-on-year.

To attract more foreign visitors, Lotte Department Store introduced the 'Lotte Tourist Membership,' an exclusive membership card for foreigners, at its flagship store in December last year. The membership is easy to join with just a passport and email verification, and it offers discount benefits not only at the department store but also at other group affiliates such as Lotte Mart and Lotte Duty Free Shop. The membership drew attention by surpassing 65,000 issued cards within five months of its launch. Starting this month, issuance has expanded to the Jamsil store, which is also a popular destination for foreign visitors.

Since March 2023, Shinsegae Department Store has established the MD (Merchandising) Content Development Team, a dedicated pop-up store organization under its Merchandise Division. This team discovers new attractions and entertainment not only to attract domestic customers but also foreign tourists. The team has successfully held three pop-up stores for the idol group Seventeen, and introduced pop-ups for Netflix originals such as Squid Game Seasons 2 and 3 and Demon Slayer. In March, Shinsegae Department Store became the first in the industry to host a pop-up celebrating the comeback of BTS (Bangtan Boys).

Additionally, Hyundai Department Store established a global marketing organization under its main business division in November 2024 to formulate key business strategies for foreign customers and offer a differentiated shopping experience. This organization is responsible for planning and operating content and services for foreign clients. For example, earlier this year, Hyundai Department Store launched a tour pass for foreign tourists visiting Seoul in collaboration with domestic and international travel platforms, and also participated in developing transfer tour courses and content at The Hyundai Seoul.

An industry insider commented, "The K-content craze, which is gaining popularity in overseas markets, is spreading to the domestic market. As a result, inbound tourists are experiencing Korean shopping culture and increasingly purchasing related products. We expect the share of foreign customers in department store sales to continue growing, and plan to strengthen differentiated products and specialized stores targeting these customers."

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