VIETNAM. Lotte Duty Free is today opening its much-anticipated downtown duty free store in Da Nang, the Korean travel retailer’s fourth business in Vietnam. It ranks as the country’s largest duty free store.
The shop complements Lotte Duty Free’s presence at Da Nang International Airport, Cam Ranh International Airport in Nha Trang, and Nội Bài International Airport in Hanoi.
The 600-pyeong (1,983sq m) shopping zone offers a wide array of goods, featuring some 200 brands, including Vietnamese destination merchandise, perfumes & cosmetics, wines & spirits, fashion, jewellery and other accessories.
Lotte Duty Free described Vietnam as the company’s “forward base” for targeting the Southeast Asian duty free market. The travel retailer expects to achieve sales of more than LRW50 billion (US$37.8 million) a year from the downtown Da Nang operation when Vietnam’s tourism market normalises.
In 2019, before COVID-19 struck, the country’s total duty free market was worth more than KRW300 billion (US$227 million), the company said. Lotte Duty Free aims to capture more than 60% of the Vietnamese duty free market by adding a store in downtown Hanoi next year.
The store opening in Da Nang, a resort-led city located on the central Vietnam coast, is Lotte Duty Free’s second overseas opening this year. In May it opened an expansive downtown duty free store in Sydney, Australia.
Lotte Duty Free entered the Vietnamese duty free market in 2017, starting with the Da Nang International Airport store. The Nha Trang Cam Ranh International Airport business opened in 2018 followed by Hanoi in 2019. In early 2020 the global pandemic struck, putting further plans on hold. Now Vietnam’s tourism sector is recovering fast and Lotte Duty Free has seized the moment.
Lotte Duty Free CEO Kap Lee said, “Vietnam is a country with great potential in the tourism industry, and with the opening of the downtown Da Nang store, we plan to solidify our competitiveness in the Vietnam and Southeast Asian duty free markets. We will continue to expand our business through expansion.”
The Da Nang store is located on the 2nd floor of VVMall a luxury shopping centre at My Khe Beach, one of Vietnam’s most famous beaches and home to several luxury resorts, global hotels and casinos. Lotte Duty Free Shop has embraced the local environment through an interior store design featuring palm trees and the motif of My Khe Beach.
Da Nang is a fast-emerging Southeast Asian resort destination, attracting around 3.66 million visitors in pre-pandemic 2019. It is particularly popular with Koreans who make up more than 50% of total visitor numbers. When the Chinese return, which should happen in 2023, that will add further lustre to the country’s growing reputation as a travel retail market of real importance.
Lotte Duty Free is placing careful emphasis on local products such as pearls, coffee, and food, which are popular with Korean tourists, in a dedicated Vietnamese brand zone. Its offer also includes several Korean brands such as the popular ginseng brand CheongKwanJang, and blockbuster cosmetics labels Sulwhasoo and The History of Whoo, all attractive to many Chinese and Southeast Asian customers.
Post-COVID recovery accelerates
According to the Da Nang Tourism Department, hotel occupancy is quickly returning to pre-pandemic levels, approaching 75% in the first half of the year compared to just 11% in pandemic-ravaged 2021.
Lotte Duty Free is hosting a series of event to commemorate the opening of the Da Nang store. By 31 December, customers who visit the gift desk after spending at the store will receive a Da Nang premium spa voucher worth KRW50,000 (US$38). The retailer will also offer discounts of up to US$30 discount through Lotte Internet Duty Free depending on the purchase amount across all Lotte Duty Free stores in Vietnam.
LDF Belt strengthens
Lotte Duty Free Shop noted that it has now resumed all overseas operations that had been temporarily closed due to the pandemic.
As a result, first-half overseas sales surged by nearly +194% year-on-year, driving this part of Lotte Duty Free’s business into surplus.
Next year, Lotte Duty Free plans to complete the grand opening of its Singapore Changi Airport branch, further strengthening what the retailer called the ‘LDF Belt’ (Lotte Duty Free Belt) that encompasses the Asia Pacific region.
Lotte Duty Free, which started to restart its overseas business in earnest this year, now operates 13 stores in six overseas countries.