Retail in Asia


Korean duty-free sales surge in January amid last-minute rush pre-daigou regulation changes

Duty-free retail sales nationwide (excluding inflight retail) reached KRW1.59 trillion (USD1.2 billion) in January according to the Korea Duty Free Association, up +21.7 percent month-on-month.

SEE ALSO: Hong Kong retail sales growth slows in January as tourism numbers drop

The impetus was driven by sales to foreigners, which surged by +29 percent over December 2023 due to heavy ordering by daigou traders before new regulations curbing reseller activity were introduced on 1 February. Sales growth for Korean customers, both downtown and on-airport, was more modest.

Shopper numbers rose +3.1 percent to 2,254,119 driven by a +5.2 percent increase in Korean customers. Foreign shopper numbers declined -1.8 percent to 630,291.

Korean travel retailers are assessing the likely major impact of the regulations introduced on 1 February by Korea Customs Service. The changes related both to overseas bulk buyers and individual customers.

From that date, individual shoppers cannot buy more than 50 pieces of any SKU (i.e. bottles of alcohol, cartons of cigarettes, cosmetics (sets), and up to 50 other identical items) or ten bags and watches. Simultaneously, shipping such goods by freight cargo (air and sea) out of Korea for individual B2C customers is now prohibited.

SEE ALSO: Hainan Expo preview: Ireland takes country spotlight and Fashion Week set to dazzle

Customers must now hand carry as in the pre-pandemic and pre-THAAD dispute (between China and South Korea) days.

“Many retailers say that sales declined sharply in February due to the prohibition of cargo shipments,” one leading Korean duty free sector executive told The Moodie Davitt Report.