SOUTH KOREA REPORT: SM DUTY FREE


SM Duty Free reports ‘strong’ early revenues at Incheon T2


The past 18 months have been challenging for SME duty free operators, not least due to intensified competition following China’s group tour ban on visitors to South Korea in retaliation to the THAAD crisis. David Hayes examines how SM Duty Free has reacted.


S


M Duty Free has responded to South Korea’s challenging DF&TR climate with a revamp


of its downtown store located on the edge of the historic Insa-dong cultural district and near Seoul’s Gwanghwamun tourist, shopping and entertainment area. SM Duty Free has reorganised its merchandise layout to create space for a Running Man exhibition centre – based on the popular South Korean TV comedy series Running Man – in the downtown store basement, together with another South Korean- themed exhibition centre that is currently under construction. This is invariably designed to


attract more Chinese tourists to the store. “After the THAAD crisis began


there was a sudden drop in the number of Chinese tourists,” explains Lee Sun Young, Luxury Brand Team Manager Merchandising Division, SM Duty Free. “Some people thought it would


end soon and others thought it would take longer. We waited and


MAY 2018


found it would take time. “There are a lot of downtown duty


free operators in Seoul. SM Duty Free is a medium-sized company and needs to survive to grab opportunities in the future so our mother company proposed Running Man and we accepted. “Our mother company will develop


a tour package that includes entry to the Running Man exhibition. The cost is less than marketing to attract travellers, so we can offer them duty free shopping and entertainment.” “Running Man opened at the end


of 2017. Our new exhibition will open in Summer 2018,” adds Lee. Wider changes have included


strengthening the international brands display on the first floor street entry level where FIT [free independent travellers] and group tours enter the store. “We moved some brands to our


first (ground) floor, including Bally, Paul & Shark and other medium- priced watches and jewellery brands,” explains Lee. “Before our revamp we had 28


international fashion and watch brands in our basement floor. Some moved up to the first floor and some luxury, high-priced brands left our store. “Previously we had temporary


boutiques and shops on our first floor entry level. Some international brands have decided to stay on the first floor, but some South Korean fashion brands have relocated to the third and fourth floors, leaving just international brands on our first floor.” SM Duty Free opened its Seoul


downtown SM Duty Free store in late 2015. Located in the Hana Tour


“After the THAAD crisis began there was a sudden drop in the number of Chinese tourists… some people thought it would end soon and others thought it would take longer. We waited and found it would take time.”


Lee Sun Young, Luxury Brand Team Manager Merchandising Division, SM Duty Free


TRBUSINESS 119


Above: A re-assigned merchandising layout at its downtown Seoul shop has freed up space for a Running Man-themed exhibition.


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