Lotte Duty Free is targeting a +25% sales increase to $5bn in 2015, after registering a record $4.02bn in 2014 – equivalent to an additional $750m (+22.8%).

 

Not surprisingly, Lee Seung Kook, Lotte Duty Free’s Managing Director of Merchandising 1 Division is pleased, as he spoke to TRBusiness in an exclusive interview in Seoul: “For 2015 we have set a $5bn sales target; it’s a 25% increase.

 

“Our original target was $4.7bn, but after seeing January and February sales, we are confident we can increase our target to $5bn.

 

“Sales in 2015 are still growing with Chinese tourists. In 2013 Chinese customers accounted for 46% of customer spending, but in 2014 they were almost 60% because Japanese visitor spending is down, while Chinese spending has grown 58%.

 

 

 

CHINESE ONLINE SALES +60% TO $450M

“South Korean customer spending is slowly recovering by about 3%-5% so far this year. Last year, Korean customer spending dropped by 7% due to slow economic growth here.”

 

Remarkably, the retailer reports that its seven South Korean duty free shops all reported double-digit sale rises last year, headed by online sales, with Lotte’s Chinese language website taking $450m-worth of sales in 2014 – up 60% on 2014.

 

This channel of business is hugely dynamic, as predicted by TRBusiness in last year’s exclusive annual South Korean review.

 

Lotte says it is now targeting a 30% sales rise in online sales to reach $600m this year, where the major selling category is cosmetics and perfume by far.

 

 

SEOUL STORE HIT $1.8BN IN 2014

In terms of leading outlets, Lotte Duty Free’s Sogong downtown shop is its number one performing outlet in South Korea with sales of $1.8bn in 2014 and the highest selling retail outlet above all other duty free and duty paid shops in South Korea.

 

This store has undergone major expansion in recent times and registered a 39% sales rise last year. By contrast with its leading downtown outlet, Lotte’s duty free sales at Incheon International Airport reached almost $1bn in 2014 – a 13% increase on last year.

 

[A major review of the South Korean duty free market will appear in the May issue of TRBusiness, covering all of the major operators in the world’s biggest duty free market].