Revenue declines subside in July but Lotte Duty Free exercising caution

By Luke Barras-hill and Andrew Pentol |

Lotte Duty Free sales have started to improve, with July sales falling by 32% year-on-year versus -40% in June. Pictured is the customer service desk at its flagship Myeongdong shop in Seoul.

Lotte Duty Free has reported consecutive sales improvements in the three months to July.

While still languishing in negative revenue growth territory, South Korea’s leading DF&TR company posted a -32% decline in July year-on-year versus -40% in June (yoy) and -50% in May (yoy).

“It is nearly all daigou sales at the moment,” a Lotte Duty Free source told TRBusiness.

Lotte Duty Free has been permitted to offload surplus duty free stock through domestic sales channels in recent months to assuage some of the damage caused to sales related to the coronavirus (Covid-19) outbreak.

“[Selling excess stock] does help, but not a lot since only fashion and leather products are sold,” added the source.

“The Korean duty free market will likely be buoyed by the continued recovery in the daigou business. However, it will likely take a long period of time to get back to pre-Covid-19 levels.”

As reported, Chinese daigou buyers helped soften the blow to South Korean duty free cosmetics sales in the first six months of this year, despite every DF&TR product category suffering.

The usually US$20bn-plus per annum market has recorded consecutive month-on-month sales growth between April and June.

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