The Shilla Duty Free is preparing to extend its Jeju Island downtown duty free shop in April as part of plans to boost the company’s domestic and airport duty free revenue by double-digit figures.

At the time of writing, Shilla was converting unused space on the top floor of the company’s four-storey Jeju downtown duty free store into a new retail display area.

The initiative will expand the downtown shop’s total sales area by 10% and enable Shilla to increase the number of smaller South Korean cosmetics brands on display.

“We are expanding our Jeju downtown store’s size – we have three-and-a-half floors in service; now we are expanding by another half floor area,” explained Taeho Kim, Executive Vice President of Hotel Shilla Co. Ltd’s Korean travel retail division, talking exclusively to TRBusiness.

“We will have the grand opening in April 2019 and then use the shop’s entire four floors. We are extending the Jeju store to provide a better shopping environment and to discover promising small and medium brand labels. We will have another 10% of floor space. We can invite more brands to that space.”

SHILLA TIPPING BROADENS REACH

In addition to expanding the Jeju shop’s top floor display zone, Shilla Duty Free has begun to re-arrange the retail layout on two other floors.

“We plan to have small Korean perfume and cosmetics brands on the top floor,” Kim explained. “All those brands used to be on the second and third floors; we are gathering them on the fourth floor with some Jeju souvenirs and food items.

“The extra space created on the second and third floors will be given to global brands as they have had trouble with the limited space there; we will also widen the customer walkways. Some more imported brands are planned too; we will do that in April.”

Downtown stores accounted for 80% of The Shilla Duty Free’s total sales in South Korea in 2018, while airport shops contributed the remaining 20% share.

Online sales form an important part of Shilla’s growing domestic downtown business.

The company’s recently launched its online ‘Tipping’ blog service, which allows users (particularly millennials) to share their experiences, product reviews, news and opinions with other Shilla customers using the app, is proving to be very popular with South Korean customers and soon will be available to Chinese and other foreign customers.

It was previously available in Korean, but Shilla had previously announced plans to embed multiple languages onto the platform.

Tipping blog users can receive up to 3% commission on duty free purchases made by other Tipping users via the blogs.

In addition to attracting growing numbers of Shilla Duty Free online customers, the Tipping service appeals to brands – particularly cosmetics companies. Many of these now want to advertise their products by sponsoring the service.

“We have an average 70,000 users a day now through our Shilla Duty Free mobile phone app” confirmed a Shilla spokesperson. “Tipping is in Korean right now; we are planning to provide Tipping in other languages such as Chinese, English and Japanese.

“Our Tipping blog is for South Korean customers now and has been part of our online service since September 2018. Tipping is something no other duty free operator has here. We had 10 million visitors to Tipping in just the few months it was available last year.”