Lotte opens 6,612sq m Jeju duty free store

By David Hayes |

Lotte Duty Free has opened its new Jeju Island downtown duty free store on the first to third floors of the Lotte City Hotel located in the Doryeong-ro district of Jeju city, the island’s main centre.



The new store’s area is two and a half times larger than Lotte’s previous Jeju downtown shop which it is replacing and Lotte Duty Free President, Lee Hong Kyun, told company staff and invited guests at the opening that the company plans to develop other entertainment and cultural attractions nearby.



He said this is part of its social contribution programme designed to support Jeju Island’s international tourism development efforts.





“Lotte Duty Free Jeju store, standing on the base of its local corporation, Lotte Duty Free Jeju Co Ltd, will make a shopping cluster in Jeju and attract foreign tourists in accordance with the tourism development policy of Jeju,” he said.



Lotte has designed its new Jeju store layout and chosen brands to appeal strongly to Mainland Chinese customers – the largest group of foreign visitors. The store’s highlights also include a cosmetics zone featuring 70 international perfume and cosmetics brands and a K-fashion zone, displaying top local fashion brands and designer collections, reflecting their growing popularity in China.



Lotte Duty Free Jeju clams to have invested W.800m ($72m) in building the interior zones for liquor and tobacco, foodstuffs and confectionery, electronics and gifts, while choosing high class materials to match the store’s ambience with the ‘elegance’ of the luxury brands on display.






In a statement, the company said: “Lotte Duty Free has analysed the preferences of Chinese tourists and launched 270 brands, including global luxury brands, jewellery, accessories, cosmetics, watches, liquor and tobacco. The global luxury jewellery brands Bvlgari and Tiffany & Co are exclusively located in Lotte Duty Free Jeju store.”



The larger retail area in the new store has allowed Lotte to expand the range of products on display. Some 110 new brands have been added to the 160 that were displayed in the company’s former Jeju store which was recently closed.



Luxury boutiques have been positioned on the first floor level, including Louis Vuitton, Cartier, Prada, Gucci and Tiffany, while international perfumes and cosmetics – plus top South Korean skincare brands – are located on the second floor, along with watches and jewellery.






South Korean products are displayed on the third floor, including mid-range local cosmetics and BB brands, ginseng products, South Korean fashion and a wide range of locally-made Jeju products sourced from 26 local companies.



Lotte Duty Free holds one of two current downtown duty free licenses for Jeju Island; the other is held by Shilla Duty Free and both contract periods and for the two licenses are different. Lotte’s previous Jeju downtown license expired mid-year.



The retailer has since moved into its new, larger duty free store after retaining its license by winning an open tender for the concession that Korea Customs Service organised earlier this year in March.





Jeju was Lotte Duty Free’s fastest growing revenue centre outside of Seoul in 2014. Sales grew by 45% to reach about $200m in the Jeju downtown store last year. Chinese visitors account for about 90% of purchases and perfume and cosmetics for around one third of sales, followed by watches and jewellery with approximately 20%.



In addition to both Lotte and Shilla, Jeju will also be home to another downtown duty free store when a third downtown license is issued shortly.


The Korea Customs Service (KCS) expects to award an SME (small and medium Enterprise) duty free license for Jeju for the very first time soon.



Bid evaluation currently is said to be underway after tenders for the single Jeju license and three new downtown duty free licenses for Seoul closed on 1 June. KCS has received three bids for the Jeju SME downtown duty free license from: Jeju Tourism Organisation (JTO); Entas Duty Free and Jeju Duty Free.






JTO is seen as the strongest bidder as a provincial government agency with an existing small domestic duty free shop which is licensed to serve only South Korean visitors to Jeju, who benefit from having a special $600-equivalent ‘domestic duty free allowance’. JTO’s bid is supported by Jeju’s provincial governor.



Meanwhile, as part of efforts to fulfil its corporate social obligation requirement, Lotte Duty Free has offered JTO the use of its previous Jeju downtown duty free shop to house the tourist organisation’s proposed SME duty free store.



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