Overall, Lotte Duty Free recorded total sales worth $4.2bn in 2015 after South Korea’s duty free industry recovered faster than expected following last May’s MERS outbreak.

 

“Lotte Duty Free felt some difficulty because of the MERS outbreak for three months and we lost one and a half months’ sales, but we recovered fast and from September our sales were normal again,” Lee Seung Kook, Managing Director of Lotte Duty Free’s Merchandising 1 Division, told TRBusiness.

 

 

“Last year we had a sales increase of 4.5% in US dollars and a 12.4% increase in South Korean won; the dollar was strong and we sell in US dollars in our shops.”

 

With Chinese visitor numbers continuing to grow and sales increasing in all the company’s downtown and airport duty free shops, Lotte is forecasting a double-digit increase in revenue this year.

 

“Our target is a 10% increase in sales this year which would be $4.6bn in total,” said Lee. “Our focus is on perfume and cosmetics, and fashion brands. We think key high value brands should have some value this year as Chinese FIT customers will buy them.”

 

The retailer says that perfume and cosmetics and fashion are the key categories of focus this year, as Lotte steps up its efforts to attract more VIP customers to its stores.

 

Sales in Lotte’s flagship Sogong downtown duty free store rose by 4.9% to reach $2bn in 2015, while the company is looking for a 15% increase in sales this year.

 

As has been widely reported, Lotte Duty Free is currently lobbying the government to retain its Lotte World Tower concession, which will expire in June – after a six-month operational grace period – unless a new license is granted.

 

 

This follows the loss of the shop license last November when the company failed to retain the Lotte World Tower concession in open bidding organised by Korea Customs Service.

 

Read the full-length interview in the May issue of TRBusiness magazine which can be picked up at the TFWA Asia Pacific Exhibition and Conference or through subscription here.