SOUTH KOREA. Duty free retail sales nationwide (excluding inflight retail) fell -13.8% month-on-month in November to KRW1,155,308,424,673.
Customer numbers eased just -1.7% to 2,121,432, the two indicators collectively underlining a continued softening of spend.
Sales to foreigners, who generated 79.7% of all revenues, slumped -15.8% to KRW921,283,362,963 (US$711.4 million) on a -5.1% decrease in customer numbers to 646,248.
“The daigou demands are diminishing due to the deepening recession of China’s economy in addition to the Korean duty free (KDF) retailers’ position refraining from high-commission daigou trade,” a leading Korean travel retail executive told The Moodie Davitt Report.
“Additionally, many major cosmetics suppliers and brands seem to be decreasing supply to KDF in order to avoid overstocking in China and degrading their brand equity.
“Also, KDF retailers are suffering from low profits or even losses due to the lack of FIT Chinese customers who spend much more than other nationalities.”
Sales to Koreans were similar month-on-month due to the muted Korean economy and Korean Thanksgiving holidays having spilled over to early October, he noted.
Incheon International Airport sales are expected to show a more normalised recovery pattern in early 2024 in tandem with the post-construction opening of major stores under the new tenders awarded earlier this year. ✈
