South Korea’s Lotte Duty Free is looking to double its share of international sales to 30% over the next five years, Daehyun Ahn, Head of Global Business Group, has told TRBusiness.
Speaking exclusively to this publication, Ahn said the expansion strategy is part of a mission to “fill the vacuum left by Chinese in Korea by pioneering overseas markets”.
Pre-Covid, Lotte Duty Free generated about 5% of its total sales outside South Korea. This year, the share is expected to stand at around 15%.
“The goal is to raise it to 30% or more over the next five years,” confirmed Ahn, in comments shared with the TRBusiness Top 10 International Operators report.
And Lotte Duty Free’s aspirations extend beyond Asia. “There is no reason not to positively review markets where Lotte Duty Free has yet to enter, such as Europe and the Middle East, if there are good opportunities,” continued Ahn.
Lotte Duty Free’s revenues reached KRW5.91 trillion (approx. US$4.73 billion) in 2022, just +1.7% ahead of 2021 figures. In 2019, revenues reached KRW9.93 trillion.
“Overseas branches are contributing to Lotte Duty Free’s sales recovery through a continuous investment in the global market,” detailed Ahn.
This will include new activities at Melbourne Airport, after the travel retailer unseated Avolta (Dufry) in the airport’s duty free tender.
When Lotte Duty Free was announced as the victor, CEO Ju Nam Kim said the retailer was “stepping up to become a leading travel retailer in the Oceania region”.
Lotte Duty Free’s four Vietnam stores are “recovering rapidly”, according to Lotte Duty Free. Meanwhile, Lotte Duty Free’s operations at Singapore Changi Airport – the travel retailer recently unveiled facelifted units at Terminal 2 after it fully re-opened on 1 November – is expected to “continue its good performance as sales have increased significantly since last year”.
“Travel demand, which has been suppressed around the world, is exploding this year,” said a Lotte Duty Free spokesperson.
“Despite rising prices and a slowdown in luxury consumption, the demand for shopping from overseas travellers is expected to increase for the time being, which will have a positive impact.”
For further analysis and commentary on Lotte Duty Free, read the TRBusiness Top 10 International Operators report by clicking here.