SOUTH KOREA. Lotte Duty Free, South Korea’s leading travel retailer, is continuing a year-round celebration of its 30th anniversary in 2010.
The company holds around 50% of the lucrative South Korean duty free market and has become one of Asia’s and the world’s leading travel retail companies.
It has eight branches in Korea nationwide (flagship Lotte Duty Free Shop and a related lobby shop at nearby Hotel Lotte; Lotte World, Lotte Jeju, Lotte Jeju Airport, Lotte Busan, Lotte Gimhae Airport, Lotte Incheon Airport) along with two Lotte internet virtual stores.
Lotte Duty Free began operations in 1980 with the establishment of its first store in downtown Seoul. Over the ensuing three decades it has created a series of firsts in the country, including becoming the first duty free retailer to open French luxury brand Louis Vuitton (in 1984).
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Let the party begin: A scene from Lotte’s 30th anniversary dinner in February |
This was followed by the opening of Hermès and Chanel in 1985 and 86, respectively, for the first time in South Korea, helping to create the high-end brand image that Lotte has been synonymous with since.
The company’s continues to focus heavily on premier brand selection and new store launches. In December 2009, for example, it opened Balenciaga and Miu Miu – both world travel retail debuts.
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In its anniversary year Lotte Duty Free is underlining the differentiated approach between its various operations. Each branch has its own management strategy and target customers, for example, the company told The Moodie Report.
Flagship location, Lotte Duty Free Shop, located on the 9th and 10th floor of the Lotte Department Store in downtown Seoul, Myeong-dong, targets a large number of inbound tourists, particularly Japanese.
There the key focus is on cosmetics, designer goods and Korean specialties. In addition, and as reported, an exhibition hall named “˜Star Avenue’ was established recently at the entrance of Lotte Department Store to give visitors opportunities to experience Korean pop culture. The attraction allows tourists to enjoy various activities, including interactive video clips of famous Korean stars.
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Fine French wines are now making their mark in the Lotte liquor portfolio at Incheon International Airport |
Lotte World Duty Free Shop is situated near residential areas, which are home to Lotte World, Lotte Department Store in Jamsil district, Seokchon Lake and the Olympic Gymnastic Stadium.
Such proximity to residential areas has contributed to attracting a great number of Korean shoppers, especially those who live in Gangnam District-one of the most affluent districts in Seoul.
On the holiday island of Jeju, the Lotte store has witnessed a huge influx of Chinese visitors, leading to the recruitment of Chinese-speaking staff. Located in Lotte Hotel Jeju in the Jungmun Tourist Complex, Lotte Jeju Duty Free Shop focused on providing special services and promotional activities targeted specifically at Chinese customers.
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Miu Miu is one of the latest in a long line-up of stellar brands that have driven Lotte’s reputation for luxury |
On top of this, Lotte Duty Free is seeing “remarkable growth” in online shopping, it claimed. “In particular, outbound tourists in their 20s and 30s are showing high demand for internet shopping. To boost customer satisfaction, online promotion and gift events have been carried out while the assortment of brands and products has gained more significance.”
The company said it is striving for better synergy by connecting online and offline promotion activities.
As reported, Lotte is awaiting the Korea Fair Trade Commission’s review of its proposed takeover of rival AK Duty Free. The company said that through its Japanese offices in Tokyo, Fukuoka and Osaka it is contantly reviewing its services and identifying changes in the all-important Japanese market.
The company continuously seeks to expand its presence in overseas markets, it added, though to date there have been no major breakthroughs.
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High-end cosmetics (above) and watches (below) typify Lotte’s upscale approach at its Seoul outlets |
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Sunglasses is one of the fastest-growing categories at Lotte Duty Free’s flagship store in downtown Seoul |
RIDING THE KOREAN WAVE
In recent times Lotte has benefited from a hugely successful marketing campaign that has allowed it to differentiate itself from its competitors – “˜Korean wave’.
The term refers to the huge popularity of Korean popular culture which is particularly pronounced in Japan and other parts of Asia.
In particular, the TV drama “˜Winter Sonata’ starring Bae Yong-jun (at the time a model for Lotte Duty Free) attracted a huge number of Japanese fans for Korean pop culture. “This was when the “˜Korean wave’ started in earnest,” said Lotte.
Since then, the company has tapped into the phenomenon as a fulcrum of its new marketing strategy.
In 2009, Lotte Duty Free chose eight famous stars as models to appeal to its customers: Korean actors (Song Seung-heon, Park Yong-ha, Ji Seong, Kang Ji-hwan), Korean singers (Rain, Big Bang), a Korean actress (Shin Min-ah), and a Japanese make-up artist (Ikko).
Korean wave has adopted a motto which translates as “˜Go beyond the best product and service quality to provide the greatest pleasure and satisfaction’ to underpin the campaign.
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Lotte was profiled in The Moodie Report Print Edition for February 2010 |
The concept gained momentum with the opening of an entertainment venue named “˜Star Avenue Lotte World’ at Lotte World, Seoul, on 30 June 2009. The hall is comprised of various sections, including “˜Star Showcase’ – an exhibition of the entertainers’ favourite items and photos – and “˜With Star’, which allows visitors a chance to participate in soap operas. It is open to anyone and free of charge to those who purchased at Lotte World Duty Free Shop.
The successful opening of Star Avenue Lotte World was followed by “˜Star Avenue Lotte Town’, which was established in Myeong-dong on 22 December to emerge as a new landmark in Seoul.
Summing up its evolving philosophy in this landmark year, the company said it believes that if it goes one step further than its rivals by fostering an environment where foreign visitors can enjoy shopping and Korean pop culture at the same time, it can not only raise its image as a premier retailing center which provides pleasure beyond shopping but also attract more customers.
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The popular ‘Mix-it’ bar at one of Lotte’s Incheon International Airport stores |
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