SOUTH KOREA. Duty-free retail sales nationwide (excluding inflight retail) slumped by -42.5% month-on-month and -16.1% year-on-year in February to KRW915.2 billion (US$680 million). Shopper numbers fell by -5.3% month-on-month to 2,135,299.
The fall was driven by new regulations introduced on 1 February that curb reseller activity. The dramatic impact can be best gauged from the respective downtown duty-free sales for January and February as well as the -50.1% month-on-month collapse in sales to foreigners to KRW663.3 billion (US$492.7 million).
Downtown duty-free sales – driven almost entirely in recent years by diagou reselling into China – fell -48.9% month-on-month to KRW694.3 billion (US$515.7 million).
“I expect the market to settle down in coming months with daigou business steadily declining. Many people within the industry hope that group tourist numbers from China will increase markedly from April,” a senior Korean travel retail executive told The Moodie Davitt Report.
“We are entering a kind of new normal, i.e. real travel retail instead of being the wholesale centre of the region.” ✈
