Higher spends among South Korean and Chinese customers boosted The Shilla Duty Free’s domestic airport and downtown revenues by 20% to $3bn in 2017, the retailer has told TRBusiness.

Shilla Duty Free Executive Vice President Taeho Kim revealed the impressive result in a recent interview with Asia Correspondent David Hayes.

It comes amid tough market conditions experienced in 2017 due to China’s ban on group tours to South Korea in retaliation to THAAD, as well documented.

“Generally speaking our business is very good right now,” commented Kim. “Compared to 2016, spend per person has increased enormously for South Korean and Chinese customers. Even though there was diplomatic turbulence between South Korea and China, per capita spending has witnessed healthy growth.”

P&C CONTINUES RISE

Shilla has made no secret of its desire to become a global duty free beauty powerhouse, something Kim reiterated to TRBusiness in this year’s Global Industry Survey (see the January issue for the full story).

The retailer’s central flagship outlet in Seoul – it’s largest domestic operation – racked up sales of approximately $1.8bn (+25%) representing roughly 60% of Shilla’s total domestic sales.

Sales at Seoul Incheon Airport, where Shilla recently opened six new P&C concessions spread over 1,105sq at T2, added around $650m to the total, with revenue at its downtown Jeju store topping $500m.

Despite the wane in Chinese visitors, Shilla recorded a +50% increase in per capita spending among the nationality.

“We don’t know why exactly, but in general we feel people have a high demand for South Korean products,” said Kim. “As there is a limited chance for Chinese people to visit South Korea, they must maximise spending when visiting as they have fewer opportunity than previously.”

Luxury fashion also continues to perform well, with healthy organic growth among the aforementioned Chinese and South Korean consumers.

Funneling sales through three channels – online, downtown and airport – allows Shilla to cement its competitive returns, added the retailer.

“Our ratio of online sales constantly increases by double-digit figures,” said Kim. “We expect online shopping to eventually reach 50% –online sales growth is faster than offline.”

Click here to subscribe and read the full interview, available in the forthcoming May Asia Pacific issue.