SOUTH KOREA REPORT: SHINSEGAE DUTY FREE
Shinsegae says it is currently targeting sales at the Gangnam downtown store to reach 70% of the Myeongdong duty free shop’s annual revenue for which it has set a US$1bn sales goal in 2017; the first full year of trading for the shop.
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Shinsegae’s previous strong revenue growth forecasts for 2017 have been thrown into doubt recently by China’s clampdown on mainland tourist visits to South Korea over the THAAD missile crisis.
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brands, mainly European brands; most of them already are in the domestic market here.” Customers
looking for
conventional duty free brands will be well catered for as well. “We cannot ignore traditional
classic brands,” Hong pointed out. “We will fine tune these with contemporary brands, but definitely we want to differentiate our shop from other South Korean duty free stores, by mixing traditional luxury and contemporary brands.”
Differentiating the offer In addition to differentiating the new Gangnam duty free store from competing downtown duty free outlets in Seoul, Shinsegae Duty Free also wants provide an alternative offer to the company’s own Myeongdong downtown duty free store, which it opened recently. “An international design company
is doing the Gangnam store design concept for us. Perfumes & cosmetics, watches & jewellery will be on at least two floors while fashion & accessories will be on two to three floors,” Hong revealed. “We want a different shop, not
a copy of our Shinsegae Duty Free Myeongdong store. The floor layout and the atmosphere will be different. “It’s only about 6km from
Myeongdong to the Express Bus Terminal and 20 minutes by car, so we have to think about the interaction between the two shops. “Our duty free business is mostly
targeting sales at the Gangnam downtown store to reach 70% of the Myeongdong duty free shop’s annual revenue for which it has set a US$1bn sales goal in 2017; the first full year the shop has been trading. By contrast Shinsegae Duty Free’s
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Busan Centum downtown shop’s target has been set at $300m for 2017, which is also the first full year of trading for this shop. “We want customers to feel cosy
and luxurious in our Gangnam downtown store,” Hong explained. “We don’t want an entire floor to be perfume & cosmetics, fashion, watches or another category. We want to mix categories. “We don’t want our new store
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May 2017 20
YEARS 1997-2017
The successful launch of Shinsegae Duty Free Myeongdong shop has created high hopes of repeat success with the new Gangnam shop. “In the same way we can make
TRBusiness Annual South Korea Report
a success of our Shinsegae Duty Free Gangnam store which is in the second most popular area for foreign visitors in Seoul,” added Hong.
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Hong Seok Ho Shinsegae shoots for $1bn sales target in 2017... p115
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Gangnam: No 1 for fashion “New generation 20-30 year-old Chinese ladies are looking for new experiences and are interested in South Korean fashion. Gangnam is the No 1 fashion district in Seoul, so if we have a duty free shop there we have a chance to attract a lot of FITs to our shop.” Shinsegae registered an impressive
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to be like a group tour destination where it’s important to locate goods for fast pick & go shopping and to have the same category goods in the same area. “Instead we want to provide
leisurely shopping so that customers enjoy our store and the shopping experience.”
six-fold increase in daily sales last year at its new flagship Shinsegae Duty Free Myeongdong downtown store in Seoul, with revenue rising from US$500,000 a day in May 2016, to reach US$3m per day by mid-December of the same year. “Our sales were a bit better than
we expected because of our good location in Myeongdong which is the No 1 destination for foreign visitors, especially Chinese,” explained Hong.
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FITs in Myeongdong and some group tours. Shinsegae’s style is well matched with FITs and Gangnam is not a group tour destination.” Shinsegae says it is currently
MAY 2017
Hermès was the most recent boutique to be opened by Shinsegae at Incheon Airport. TRBUSINESS 117
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