Duty-free looks to May vacations for sales spurt

The duty-free industry here is looking to attract Korean shoppers going abroad in early May to prop up its falling sales as it continues to lose revenue from Chinese tourists.

Since mid-March, the duty-free industry has suffered major blows to its sales following the ban on travel packages to Korea imposed by Beijing in response to Seoul’s decision to bring an American anti-missile defense system here.

Major duty-free operators such as Lotte Duty Free reported sales decreases of up to 30 percent from Chinese tourists following the ban, with officials at other duty-free operators saying that further drops are likely to become apparent in April and May.

Meanwhile, sales among Korean shoppers have been increasing ahead of May, the first week of which has three national holidays. By using just two vacation days, it is possible for Koreans to enjoy a nine-day weekend, long enough for overseas travels.

“More people are shopping duty-free ahead of their vacations in May, so sales are naturally going up,” said a spokesman for Shilla Duty Free.

“There are more people shopping duty-free ahead of the holidays, and the amount being spent by each shopper is also rising,” said a spokesman for Lotte Duty Free.

The duty-free industry is intensifying competition to capture the outbound market with promotions that focus on providing more value for each dollar spent.

Lotte Duty Free is currently offering shoppers gift cards and tickets to the Lotte Family Festival concert to be held in May, according to the amount spent at its stores. Shoppers also have the opportunity to be entered into a lucky draw for an expenses-paid trip to Melbourne.

Shilla Duty Free is also offering gift cards to shoppers at its Seoul branch, as well as points that can be used like cash on its online store.

Shinsegae DF is providing free passes to the buffet at the JW Marriott Seoul, Everland theme park, and the Hanam Aquafield Water Park in addition to gift cards that depend on shoppers’ spending totals.

Shilla IPark Duty Free in central Seoul allows shoppers to make reservations at its brands in a Private Sale event that provides 15 to 40 percent in-store discounts.

However, industry insiders say that they are aware that this will be only a temporary spurt in sales.

“It is impossible to expect that sales will be able to return to last year’s levels by simply increasing sales from outbound travelers,” said a spokesperson for one duty-free operator. “Our efforts to bring in customers from Southeast Asia and Japan are showing results, but it will be a long time before we can begin to win back the sales we enjoyed with Chinese tourists.”

By Won Ho-jung (hjwon@heraldcorp.com)