LEADING ASIA PACIFIC OPERATORS: LOTTE DUTY FREE


Lotte Duty Free plots e-commerce strike on AUS business following Oceania foray


Scaling up its e-commerce business in Australia is one of Lotte Duty Free’s chief goals this year as it aims to exploit an untapped online duty free market. Luke Barras-Hill reports.


Above: Lotte Duty Free plans to stabilise its new business in the Oceania markets this year following the Brisbane Airport grand opening in March.


I


n January, Lotte Duty Free told TRBusiness in the Annual Global Industry Survey that 2019 marked


the beginning of a ‘fresh era’. Kap Lee, who was announced


as the new CEO in the same month, replacing Jang Sun-wook, said he would ‘do his best to find breakthroughs’ as the Korean travel retail giant continues to rebound from what has been an arduous domestic situation. Of huge importance to the travel


retailer last year was a resurgence in its domestic market sales, which rose by 24.4%. This result owed much to


‘successful marketing strategies for online and offline stores and timely crisis management’, Marketing Director Bo-jun Kim said at the time.


“The market conditions have not yet returned to pre- THAAD levels.”


Kap Lee, CEO, Lotte Duty Free


36 TRBUSINESS


The result was a 25% rise in total sales in excess of KRW7.5tn ($6.7bn). All Lotte’s domestic stores with the


exception of its Incheon International Airport Terminal 1 branches posted growth, with revenue at its flagship Myeongdong and World Tower outlets reaching approximately KRW4.3tn ($3.8bn) and KRW1tn ($881m), respectively.


Fierce domestic competition The former in particular grew its sales by 35% last year and Lee reveals to TRBusiness that sales in the region of $5bn are expected this year. If that is achieved, it would represent a significant achievement in the context of the domestic strains seen in the past few years. Speaking to TRBusiness exclusively


this issue, new CEO Kap Lee added his thoughts on Lotte Duty Free’s performance in 2018. “2018 was a stellar year for Lotte


Duty Free in achieving those figures in a competitive market. However, we are vigilant. The domestic business is expected to be more intense this year due to many issues such as more


licences for downtown stores, China’s new e-commerce law, and the RFP for the Incheon Airport Terminal 1 concession.” Tensions with China over the US-


supplied THAAD missile defence system appear to have cooled drastically, with Chinese arrivals to South Korea growing by a healthy 31.3%, according to the latest February


Lotte Duty Free’s World Tower store in Seoul re-opened in January 2017.


MAY 2019


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