Duty-free retail sales nationwide (excluding inflight retail) edged ahead by +0.3 percent month-on-month (and +8.4 percent year-on-year) in May to KRW1,254,220,353,167 (USD908,013,105), according to newly released Korea Duty Free Association figures.
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The number of shoppers increased +4 percent month-on-month (but +38.5 percent year-on-year in line with the post-Covid rebound of outbound Korean travellers) to 2,431,420.
The disparity between the robust year-on-year growth in shopper numbers and the modest rise in sales once again reflects a decrease in the previously overwhelmingly dominant bulk reseller business into China, hit hard (though far from eliminated) by the Korea Customs Service crackdown on the daigou channel last year.
Sales to foreign shoppers (mainly Chinese) fell -0.98 percent month-on-month to KRW985,229,208,654 (USD713,272,616) despite a +2.5 percent increase in customer numbers to 817,985.
In May 2023, sales to foreigners reached KRW938,114,150,128 (USD679,162,908) despite there being just 510,016 customers (only 60.4 percent of the May 2024 number).
Airport departure duty-free sales rose +2.4 percent month-on-month to KRW192,771,266,400 (USD139.6 million).
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“In Korean duty-free, sales to foreigners are stagnating continuously due to sagging daigou demands,” one senior Korean travel retail executive told The Moodie Davitt Report.
“The duty-free retailers’ profits are worsening amid an adverse market environment. The retailers’ second-quarter P&Ls, which will be posted in July, will represent important milestones in terms of their prospects.”
(Source: The Moodie Davitt Report)