Korean duty-free stores to target global consumers online

South Korea’s duty-free giants are preparing to compete in the larger global consumer market, as permission has been granted to provide online malls to foreign citizens.

According to the source, the top four duty-free shop operators in Korea – Lotte, Shilla, Shinsegae, and Hyundai, have launched foreign language e-commerce platforms so that non-Koreans can purchase Korean goods directly from manufacturers without a middleman.

Guidelines for duty-free online sales of Korean goods were developed by the Korea Customs Service in March. The goods, which will be available in July to overseas consumers, include cosmetics, clothes, functional foods, and electronic items.

After suffering greatly from the pandemic impact to tourism, the liberalisation was introduced to help duty-free shop operators increase sales channels as e-commerce has no price limit.

The third-largest duty-free retailer in the world, Shilla Duty Free Shop, and Cainiao Network, a division of Alibaba’s logistics business who is planning to offer end-to-end shipping services for Korean goods to Chinese consumers, have agreed to work together to export duty-free goods from Korea. In order to launch its online mall in July, the company has prepared roughly 300 well-known products.

Chinese cross-border shoppers were anticipated to number 158 million in 2020, and the market is expected to rise for some time given the rising spending power of Chinese consumers and the increased demand for imported goods in the largest consumer market in the world.

Lotte Duty Free will also launch its online storefront targeting consumers. It intends to provide services to citizens of nine nations, including China, Japan, and the USA. There will be 220 Korean products in its lineup, including cosmetics and apparel.

While Hyundai Duty Free Shop has begun brand selections in preparation for the second half of the year, Shinsegae Duty Free aims to launch an online mall in July that will cater Chinese consumers.