SEOUL, Feb. 28 (Korea Bizwire) – The record-setting sales at local duty-free shops last month were due heavily to private vendors, a likely sign of an abnormal and fleeting pickup in business, industry sources said Wednesday.
The duty-free stores recorded sales of US$1.38 billion in January, up 42.4 percent from the same month a year ago, according to the Korea Duty Free Shops Association. The latest figure set a new sales record after the previous one four months ago.
Sales to foreign customers totaled $1.06 billion, exceeding $1 billion for the first time after a 50.9 percent rise from January of the previous year.
The number of foreign purchasers, however, shrank 19.9 percent to 1.34 million, while the amount of purchases by individuals jumped 88.6 percent to $794.3, according to the data from the association.
Sources say the breakdown of the data suggests much of the purchases at the stores were made not by group tourists but vendors, notably from China, doing private business.
“The current market in which sales rely on vendors does not make sense. Even if sales are increasing, profitability is falling. It’s difficult to call this a normal market,” one source said.
“Vendor sales are sensitive to demands in China,” another source said. “We cannot expect such sales to increase continuously.”