South Korea’s duty free and travel retail industry registered total sales of $8.14bn in 2015, which included operations at airport, seaport and downtown shops (plus internet sales) and ‘domestic duty free’ sales on Jeju Island. They did not include inflight sales.

 

This represented a sales increase of $200m in 2015, according to reliable duty free sources in South Korea, interviewed by TRBusiness for an exclusive report on the region, in the May issue of the magazine.

 

China Central Television recently reported that an estimated 6.1m Chinese tourists visited South Korea in 2015, accounting for more than 40% of all foreign tourists.

 

 

As Chinese and Southeast Asian visitor arrivals pick up, leading South Korean duty free retailers and state-run airport companies are setting double-digit growth targets for 2016.

 

The growing number of downtown, airport and seaport duty free store operators are also upbeat, with many setting ambitious sales targets for their first year of trading.

 

This is perhaps unsurprising considering that the number of Chinese tourists is expected to rise more than three-fold over the next five years, lifting duty free operators’ hopes of a continuing duty free shopping boom.

 

The South Korean government also aims to attract 20m Chinese visitors by 2020 as part of efforts to make the country a favourite destination for mainland travellers.

 

As business improved at the end of last year, several long-term trends became evident. For example, revenue at downtown duty free stores continued to grow faster than at airports in South Korea’s three major duty free shopping centres – Seoul, Jeju Island and Busan.

 

 

Incheon International Airport registered a 4% decrease in total duty free revenue in 2015 with combined sales for all operators at the airport reaching US$1.88bn, down from $2bn the previous year. [See the exclusive cover interview with IIAC’s Kim Bum Ho in the May issue of TRBusiness].

 

The impact of the MERS crisis on passenger traffic at Incheon Airport certainly had an affect on duty free revenue, as did disruption to shopping facilities caused by shop renovations.

 

This followed the start of Incheon’s new five-year duty free concession period on 1 September 2015, when the seven new operators took over new shops and boutiques.

 

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.