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The influence of the South Korean travelling shopper is rising

The South Korean duty free and travel retail industry may still be reeling from last year’s ban placed on group travel to South Korea by the Chinese government, but it has put renewed focus on South Korean shoppers. 

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This segment is set to become a key focus for DF&TR operators based on data in a new 76-page report available now as a valuable complimentary resource for your business. The South Korean Traveller – released in May – offers an in-depth analysis of this passenger’s shopping and buyer behaviour. The report indicates that this nationality is now the seventh biggest spender on tourism in the world at US$27bn, but more crucially to retailers, international growth is set to rise dramatically.

An extra 17.5 million departures by 2027

CiR estimates that outbound South Korean traffic could grow by as much as +80% by 2027 at a compound annual growth rate of almost +7% per year (see chart). This increase would represent an absolute growth of over 17.5 million departures versus 2017 as South Koreans continue to be a key volume driver across Asia Pacific and globally.

While South Korea is heavily reliant on Chinese tourists – the Korean Tourism Organization estimates that they accounted for close to half of all international arrivals in 2016 – the market is also exposed to indigenous South Korean outbound travellers, in both downtown DF&TR stores and at airports. 

From an airport departures perspective the South Korean retail landscape is unique in that at Incheon airport – which accounts for almost 4 in 5 South Korean international departures – there are several operators competing for potential customers, including regional powerhouses such as Lotte and The Shilla, Shinsegae and Entas, as well as smaller enterprises.

Lotte currently holds the lion’s share of outbound PAX exposure, according to CiR data, with other retailers having lower, but similar exposure as each other. Although Lotte has just terminated its contracts for Perfume & Cosmetics, Leather Goods and Fashion at Incheon T1 – following burdening rent increases and plummeting Chinese passenger numbers – the retailer kept its main Liquor & Tobacco licence.

The world’s largest travel retail operator, Dufry, also has a stake in the Korean DF&TR market, with a subsidiary of the company capturing a duty free concession at Gimhae International Airport in Busan in 2013.

While the Chinese travel ban is now technically over DF&TR sales in South Korea have become more reliant on home-grown shoppers.

Garry Stasiulevicuis, Founder and President of CiR, comments: “As South Korean operators take more notice of indigenous travellers, so too should DF&TR operators in other markets when South Koreans are travelling. Europe is seeing high growth at +13.5% and the Americas at +12.6%. Of course, Asia Pacific is where the vast majority of South Korean still travel, and Japan in particular has great opportunities to capitalise on the +26% year-on-year growth of Korean travellers there in 2017.”



He continues, “The CiR South Korean Traveller report offers comprehensive insights about this key nationality, including identifying who the South Korean traveller is, how they behave, what they purchase and why. It also offers insight into purchase barriers, and covers both departures and arrivals shopping. We’re delighted to offer this complimentary report to all of our partners and everyone in the industry who wishes to understand more about this nationality”.

Download your complimentary report today

For further information, please contact Stephen Hillam, Research Director;