SOUTH KOREA. Duty-free retail sales nationwide (excluding inflight retail) rose by +5.4% month-on-month (and +6.4% year-on-year) in April to KRW1.25 trillion (US$906.5 million), according to newly released Korea Duty Free Association figures.
The number of shoppers edged ahead by +1.4% month-on-month (but +43% year-on-year in line with the post-COVID rebound of outbound Korean travellers).
The disparity between the robust year-on-year growth in shopper numbers and the modest rise in sales reflects a decrease in the previously overwhelmingly dominant bulk reseller business into China, hit hard (though far from eliminated) by the Korea Customs Service crackdown on the daigou channel last year.
“The April numbers are a bit up from March but I am afraid the profit is as bad as March or worse,” a senior Korean travel retail executive told The Moodie Davitt Report.
“The retailers are still focusing on the daigou sector via postal courier and hand carry instead of big cargo shipments.”
For a comprehensive evaluation of the reseller business entited ‘The past, present and future of the South Korean duty-free industry’, click here. ✈
Footnote: In related news, the Gimhae International Airport tender in Busan has come down to a two-way contest between small and medium enterprises (SMEs) KyungBokKung (formerly Entas Duty Free) and Citiplus following an initial evaluation by Korea Airports Corporation. Under Korean law, the final assessment is now made by Korea Customs Service.
As reported, Lotte Duty Free is selling duty free liquor & tobacco at Gimhae on a temporary basis after the ejection of former concessionaire Dufry Thomas Julie at the end of January. Lotte Duty Free is the incumbent perfume & cosmetics concessionaire.
Korea Customs Service terminated the Dufry Thomas Julie contract on the basis that the joint venture did not constitute a SME, the basis on which the liquor & tobacco concession had been tendered and awarded.
The agency claimed that Dufry (now Avolta), a global travel retail giant, was a majority rather than minority partner in the joint venture as claimed, an allegation vehemently denied by the Swiss company.
