South Korea’s top five duty-free shops achieved sales milestone of 10 trillion won (US$8.25 billion) in the first half and are set for a record-breaking year due to outlet additions and increased Chinese shoppers.
Combined sales of five major Korean duty-free shops reached 10.16 trillion won in the first six months, the highest half-year top line data, according to industry sources on August 19.
Lotte Duty Free made up the lion’s share of 4.43 trillion won in sales, followed by Shilla Duty Free 2.97 trillion won, Shinsegae DF 2.09 trillion won, Doota Duty Free 353.5 billion won, and Hyundai Department Store Duty Free 209.9 billion won.
Duty-free operators have been extending sales growth, with combined monthly revenue hitting 2 trillion won in March from some 1 trillion won a year ago. Market experts expect this year’s full-year revenue to hit a fresh record high of over 20 trillion won after breaking the previous high of 18.96 trillion recorded last year.
Profitability also has improved with earnings growth. The average operating margin of big three names – Lotte, Shilla and Shinsegae – that hovered around 0.7 percent in 2017 due to the diplomatic row between Seoul and Beijing rose to 3.7 percent in 2018 and 5.2 percent in the first half of this year.
Meanwhile, Lotte and Shilla ranked in the world’s top three travel retailer rankings measured by sales turnover for last year, according to the Moodie Davitt Report.
Lotte Duty Free ranked second with revenue of 7.78 trillion won for full 2018, followed by Shilla Duty Free with 7 trillion won. Shinsegae DF, a latecomer in the travel retail market, ranked ninth after moving up four notches from a year ago, with revenue of 3.22 trillion won.
(Source: Pulse News)