Korean market update: February duty-free sales fall -3.8% despite Lunar New Year phasing : Moodie Davitt Report

SOUTH KOREA. Duty-free sales nationwide (excluding inflight retail) in February fell -3.82% year-on-year and -10.1% month-on-month to KRW962,369,158,434 (US$639 million), according to latest Korea Duty Free Association figures.

Customer numbers rose +12.6% year-on-year and declined -8.2% month-on-month to 2,363,206.

Comparisons were affected by Lunar New Year falling on 17 February (with the holiday period 16-18 February) this year and 29 January (28-30 January) in 2025. Theoretically that should have boosted revenues this year.

“The numbers tell the story in terms of the decrease from February 2025. The market is steadily stagnating,” a senior Korean duty-free executive commented to The Moodie Davitt Report.

“I truly think the downtown duty-free model as we once knew it driven by group tours is becoming – if it isn’t already – obsolete,” LVMH North Asia Group President Michael Schriver told us.

“For many brands today the tourist business in department stores is larger than in the downtown duty-free sector and I see this trend only accelerating as tourists want to enjoy a local experience not a manufactured tourist one. This evolution is unavoidable as consumer preferences and behaviours change.

“I think it is time the industry stops focusing on downtown duty free and instead focuses on downtown travel retail and creating experiential tourist destinations with immersive retail experiences. The difference is that it is not a price game since price is no longer really THE reason to visit. We need to create a destination tourists want to be in.”

The South Korean duty-free market remains the world’s biggest but sales (excluding inflight retail) fell -11.9% year-on-year in 2025 to US$8.6 billion despite a +3.6% rise in customer numbers. That is the lowest annual total since 2016 (see table down page) and a fall of almost -50% from the pre-pandemic 2019 level of US$17.04 billion. Given the added impact of the Middle East crisis, this year shapes as another struggle compared to the market’s halcyon days. As the table above shows, duty-free sales in February fell -3.8% year-on-year despite a +12.6% increase in customer numbers {All figures courtesy of Korea Duty Free Association, click on graphics to expand}.

Sales to foreigners (mainly Chinese) decreased -7.7% year-on-year to KRW704,730,239,177 (US$467,933,056), a -10.4% fall month-on-month.

Foreign customer numbers rose +39.1% year-on-year to 910,954, -3.3% month-on-month.

Purchases by Koreans grew +8.7% year-on-year to KRW257,638,919,257 (US$170.8 million), a -9.4% decline month-on-month. Korean customer numbers edged +0.5% ahead year-on-year but fell-11.1% compared with January 2026.

How Korean duty-free retailers are placing their bets on fusion of culture, content & commerce to revive the sector

“We believe this collaboration reflects the growing convergence of content, culture, and commerce – particularly within the global Gen Z audience.”

The words of a Shinsegae Duty Free spokesperson to The Moodie Davitt Report when revealing an exciting new fusion beween global content sensation Kpop Demon Hunters and leading K-beauty brand Anua for a limited-time pop-up neatly sum up the increasing focus of Korean travel retailers in trying to rejuvenate a seriously jaded market.

The collaboration marks a unique intersection of K-content and K-beauty, Shinsegae Duty Free said, offering global travellers a differentiated and highly engaging shopping experience.

South Korea’s duty-free industry might be facing stiff challenges but its impressive history of innovation and the surging popularity of ‘K-Everything’ – the title of a new, four-part CNN Original Series premiering on 9 May, hosted and executive produced by actor Daniel Dae Kim – augurs well for leading travel retailers’ ability to attract younger international visitors.

Such moves represent a necessary but nonetheless impressive reinvention of the business. Korean duty free might be down but it is far from out.

**K-pop-up: The exclusive Anua x *Kpop Demon Hunters* pop-up features a curated line-up of 20 special-edition products available only at Shinsegae Duty Free.**

Since its January opening, Shinsegae Duty Free’s K-Wave Zone has driven impressive sales, boosted considerably by boy group BTS’s recent blockbuster comeback concert and ahead and ahead of peer band Big Bang’s highly anticipated 20th anniversary. The K-Wave Zone has recently expanded its offering to include merchandise from eight artists, reinforcing its position as a key platform for K-content-driven spend.

Lotte Duty Free is also championing a mix of culture, content and commerce. The retailer recently unveiled the K-Museum & Gift store at its World Tower location in Seoul, a new concept designed to showcase Korean culture and heritage to foreign travellers. The store integrates gallery and retail into a single immersive environment.

**Lotte Duty Free last month unveiled the return of blockbuster K-pop girl group aespa as global ambassadors, reinforcing the retailer’s celebrity-led campaigns to connect with international shoppers**

Channel analysis

Downtown duty-free sales fell by -10.2% over February 2025 to KRW687,503,853,066 (US$456.5 million) and were down -10.9% month-on-month. Foreigners generated 83.4% of downtown sales on a 42.1% share of total customer numbers.

Drilling down further, sales to foreigners in downtown duty-free stores fell -13.5% year-on-year (-10.9% month-on-month) to KRW573,613,923,789 (US$380.9 million).

Airport sales rise sharply year-on-year

What of the airport departures business (excluding offshore duty free)? Sales grew +16.9% year-on-year to KRW231,459,843,024 (US$153.7 million), an -8.3% fall month-on-month. Customer numbers rose +13.5% year-on-year but eased -3.5% month-on-month to 1,077,063. ✈

How Korean duty-free retailers are placing their bets on fusion of culture, content & commerce to revive the sector

Channel analysis

Airport sales rise sharply year-on-year

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