SOUTH KOREA. Lotte Duty Free has launched a promotional campaign timed to coincide with the increase in the inbound duty free value allowance from US$600 to US$800, which takes effect in South Korea from 6 September.
The alcohol limit for international arrivals also rises from one litre to two (it must fall within the value allowance). As reported, the move was first flagged by the Korean Finance Ministry last month.
At Incheon International Airport Terminal 2 (departures), Lotte Duty Free is offering discounts of up to -30% for shoppers purchasing three or more bottles when they travel abroad.
“We offers discounts of -30% for purchase of three bottles, -20% for two bottles and -10% for one bottle,” a spokesperson said.
Explaining the appeal of the campaign for outbound shoppers, Lotte Duty Free said that departing travellers can purchase as many bottles as they wish to take on their overseas trip [dependent on the allowance regime in their destination country -Ed] and can now bring back two duty free under the new rules. The company said that some may choose to consume or gift purchases while overseas.
The company said that if they buy three bottles on departure, and return with all three, they pay duty on one of the bottles. If they buy none departing Korea but buy three overseas (assuming the rules in the overseas country of purchase allow this), they also pay duty on one of these bottles on their return. The increased allowance on liquor also therefore represents an opportunity for overseas duty free retailers to sell to departing Koreans.
The Lotte Duty Free campaign offers significant savings on brands such as Royal Salute, Johnnie Walker and Hennessy, said the retailer. It also features items that are difficult to find in the local market such as Glenfiddich 26 and 30 Year Old, Glenmorangie Signet, alongside duty free-exclusive lines including Royal Salute House of Queen and The Dalmore 15 Years Luminary No. 1.
At Lotte Duty Free’s downtown stores in September, selected brands (including Shui Jing Fang and Ballantine’s 21 Year Old Golden Zest) will be sold at discounts of up to -50%. From 9 September, customers who buy two or more bottles of alcohol will be presented with an eco-bag until stocks run out.
Consumers who buy liquor downtown collect their purchases at the airport pick-up counter on the day of departure. “Anyone who plans to go overseas can come and purchase. To be more specific, they may start purchasing products at a duty free shop (at downtown stores and/or online) 60 days prior to departure.”
For customers purchasing through Lotte Duty Free’s online stores there is the opportunity to win a four-person golf package in Da Nang, Vietnam. This applies to purchases of US$777 or more by 30 September, with the winners drawn by lottery. The two highest-spending customers by 30 October will receive a Lotte Resort accommodation voucher.
All purchases must fall within the total US$800 purchase limit, regardless of quantity., Lotte Duty Free noted
Addressing currency fluctuations
Lotte Duty Free has also expanded its range of promotional benefits to compensate Korean shoppers for the rise in the US Dollar exchange rate against the Korean Won.
In a programme that runs to 30 October, the retailer will present shoppers with up to KRW2.97 million (US$2,165) in credit for its digital payment platform LDF Pay, depending on the amount purchased. This includes exchange rate compensation of up to KRW500,000 (US$364), if the store-based exchange rate is KRW1,350 or more to the US Dollar. Lotte Duty Free said that this is “the largest-ever gift given to Korean customers.”
Lotte Duty Free will also introduce an additional LDF Pay gift event for the Chuseok mid-Autumn harvest holiday this month (Chuseok falls on 10 September with the holdays running from 9-12 September). Once shoppers purchase over a certain amount (up to 16 September) they can gain up to KRW200,000 (US$145) in LDF Pay, which can be used like cash in-store.
A Lotte Duty Free official said: “We expect that sales for Koreans will continue to rise due to the increase in the duty free limit.”
