Mainland Chinese spending grew 82% and Chinese customer spend per head averaged $400 at Lotte Duty Free’s Korean airport and downtown stores last year.

 

South Korean and Japanese travellers continued to rank as the other two main customer nationalities, but although South Koreans are large in numbers, their duty free spending is not growing.

 

“Even though South Korean outbound travellers increased by 5% last year, our sales to them did not increase,” said Robert Sang Yeong Park, Managing Director, Business Development Division, Lotte Duty Free.

 

“Japanese passenger numbers were down around 22% and their spending was down 43% for Lotte. We guess other duty free stores saw the same thing.”

 

Chinese customers each spent around double the amount – or more – on average, compared with other nationalities in Lotte’s downtown shops in 2013.

 

 

AVERAGE SPEND: $200/CHINESE SPEND: $400

Average spending by Lotte’s customers of all nationalities in its downtown shops was $200 per customer in 2013, while the average figure for Chinese visitor spend was $400 per customer.

 

Meanwhile, online sales continued to grow by 27% to $280m last year, as South Korean customers increasingly prefer to use this service to purchase perfume and cosmetics.

 

Lotte’s Seoul flagship store and its downtown store in Busan both offer online sales for selected merchandise with the Seoul online store recording sales worth $263m in 2013, while the Busan downtown ‘virtual’ shop sold goods worth $17m.

 

“Over 60% of the goods selling online are perfume and cosmetics. Red ginseng products are the number two. It’s mostly South Korean customers buying online,” Park said.

 

“We expect more online sales this year. We are going to try out fashion goods online, we want to introduce many brands. We will begin with three to five fashion brands this year. These will be seasonal fashion items that we offer.”

 

Online sales accounted for about 20% of total duty free sales – worth an estimated $1.3bn at Lotte’s Seoul flagship store in 2013.

 

[TOP IMAGES: Lotte Duty Free’s downtown Seoul duty free store. Photo credit: David Hayes].