The Shilla Duty Free conducted a soft opening of its new downtown store in Phuket, Thailand at the weekend, which has allowed it to take the next step in its ‘diverse global expansion strategy’, it says.

 

As reported, the store was slated to open originally in August, but the South Korean TR operator was actually able to officially add the Kathu district store to its growing international store network on 19 November. The retailer first opened a store outside Thailand in 2012 with its Changi Airport concession in Singapore. Since then Shilla has opened in Macau also.

 

This time Shilla has partnered with two local companies (Gems Gallery and The Mall) to operate the store under a ‘GMS Duty Free’ joint venture first agreed in 2013. However the store fascia with carry ‘The Shilla Duty Free’ company name.

 

Shilla says it is in charge of ‘general operation of the store including MD and store operation’.

 

TWO-STOREY 25,000SQ M STORE

“Gems Gallery, sole market leader of Phuket’s jewellery market, and The Mall, operator of top-of-the-class department stores and shopping malls in Thailand, are in charge of sourcing of Thailand local goods and marketing,” reveals Shilla.

 

 

By opening the 25,000sq m, two-storey Phuket downtown store, The Shilla Duty Free is boosting its global expansion ‘in more diverse ways’, it says.

 

The building is located 15 minutes (by car) from Patong beach and Phuket town; major tourist attractions of the island. The duty free store area, which makes up 8,000sq m, and cafeteria are on the ground floor and a Thai gourmet seafood restaurant called ‘Savoey’ is on the first floor with 500 covers/seats.

 

Shilla boasts ‘about 400 brands of cosmetics & perfume, fashion & accessories, liquor’ at the moment with more categories and brands expected to arrive by the grand opening in December. The total number of brands is expected to rise to 450, including watch & jewellery, by the end of the year.

 

 

The Shilla Duty Free says its international exploits (combined) were the best performing of any other national operator in 2015 with £336m ($422m) reported in overseas sales.

 

BUILDING ON GLOBAL EXPERIENCE

“The Shilla Duty Free is generating more than 15% of its gross sales from overseas countries,” says the company. “The new downtown store will enhance stability of overseas business by diversifying The Shilla Duty Free’s global portfolio.

 

“In addition, the opening of the Phuket store will allow The Shilla Duty Free to have stronger buying power and more operation know-how as a global TR operator.

 

“The Thailand TR industry is achieving extraordinary annual growth of 20% as the country is attracting Chinese travellers’ attention recently.”

 

 

According to the retailer, Thailand’s gross travel retail sales reached £1.6bn ($2.0bn) in 2015, making it the fifth biggest travel retail nation in Asia following South Korea, Mainland China, Hong Kong and Singapore.

 

A Shilla Duty Free official commented on the store opening: “The Phuket downtown store is very important and meaningful to The Shilla Duty Free as the store is the very first overseas downtown store the company operates. The Shilla Duty Free will constantly expand its business globally and achieve bigger success in global TR industry.”

 

Of course Shilla is also expanding its business inside Korea too. Through its HDC Shilla joint venture with Hyundai Development Company, it is operating the Shilla iPark Duty Free in Yongsan, Seoul.

 

In addition, The Shilla Duty Free established another JV in Japan with Takashimaya and ANA to launch a downtown duty free store in Tokyo, Japan.