Dongwha Duty Free in extensive expansion

By Doug Newhouse |

South Korean downtown duty free operator Dongwha Duty Free is planning a major renovation and expansion programme at its store in Seoul this summer, following a double-digit sales increase to around $210m in 2010.

Dongwha’s store is located in Seoul’s downtown Kwangwhamun area near City Hall, a popular district with tourists and local residents due to the large number of shopping, entertainment and cultural attractions nearby.

Sales rose strongly for most of last year due to the growth of customer numbers visiting the company’s city centre store as well as higher individual spending by most shoppers.

The company has negotiated with the building owner to increase its shop floor area as other tenants reduce the office space they rent in the building where Dongwha Duty Free operates.

Dongwha Duty Free Merchandise Department Buyer Christine Jeong said: “We have a renovation plan for this summer. In fact, we had a plan some time ago but now we are negotiating with different brands about the new layout. Hopefully we will open the new area this summer.”

“Now we occupy the whole basement and the whole first floor. We have a plan to expand to the second and third floors of this building.

“The second floor is occupied by a bank now. We will take one side of the second floor covering about 500 square metres. The third floor now is used for offices. We will take the whole third floor. This is a big project.”

Plans call for the cosmetics section to move up to the third floor from the basement where fashion goods, brand boutiques and leather goods also are located. 

“All international and some high-end Korean cosmetics will move up to the third floor,” Jeong said. “Some new cosmetics brands will come in as we do not have all major skincare brands yet. Also, our existing cosmetics brands will be able to have more space. Most cosmetics brand displays will be a little bit bigger.

“South Korean people like to buy cosmetics so we will position skincare, make up and organic products carefully.”

Perfumes and cosmetics are the main products selling in the store, accounting for more than 40% of Dongwha Duty Free’s total duty free sales, followed by fashion boutiques with 30%, watches 10%. 

Under the current schedule the shop expansion and renovation is due for completion in July. Jeong noted that both the new second and third floor shop areas are expected to open on the same day, although the timetable may be altered.

Dongwha’s sales rose by more than 15% in 2010. Based on sales of $180m in 2009, the retailer’s sales are estimated to have reached around $210m last year. Growing numbers of high-spending Chinese visitors helped boost duty free revenue last year, with the average Chinese customer spending between $400 to $500.


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