Tourists look around at Lotte Department Store’s duty-free shop in Sogong-dong, downtown Seoul, on January 19.
SEOUL, Jan. 20 (Korea Bizwire) – As the growth of existing distribution channels such as department stores and big box discount stores reaches its limit, Korean retailers are rushing to open duty-free shops in an attempt to find new sources of revenue.
According to industry experts, with the government planning to set up four more large-scale duty-free shops, three in Seoul and one in Jeju, the retail industry is aiming to obtain operation rights for the shops, as the market is one of the only ways in which they can expect stable growth and profits.
The duty-free shop market has seen double digit growth rate annually from 4.5 trillion won in 2010 to 7.5 trillion in 2014, thanks mainly to increases in the number of Chinese tourists.
Currently, there are a total of six duty-free shops in Seoul. Lotte Group runs three shops and Shilla Hotel, Donghwa and Walkerhill run one each. It has been 15 years since Seoul’s duty-free shop market received new players.
Among the players, Lotte is not willing to join the bidding as it already runs three duty free shops in Seoul. Rather, it is expected to focus on the new shop in Jeju.
Recently, as Hyundai Development Company, which runs the Hyundai I-Park Mall in Seoul, declared an intention to join in the market, competition in the bidding war for the new duty-free shop in Seoul is expected to increase. Shinsegae, Galleria and Walkerhill are also expected join the bidding.
By Lina Jang (linajang@koreabizwire.com)
