SOUTH KOREA: SHILLA DUTY FREE


Shilla raises game as stakes become even higher in Korea


Taeho Kim, Executive Vice President of Hotel Shilla Co Ltd’s Travel Retail Business Korea Division tells David Hayes that The Shilla Duty Free’s domestic revenue grew 38% in 2018, pushing sales up to $4.3bn – the largest return in its history.


D


espite the absence of Chinese group tours, The Shilla Duty Free’s sales in


Korea surged nearly 40% in 2018, leaving the company confident of further double-digit growth in 2019. Attributing some of its success


to its new airport stores, Shilla tells TRBusiness that


its Incheon


International Airport Terminal 2 shops performed strongly and the opening of the company’s new Jeju International Airport store helped to boost revenue in 2018. This year, Shilla expects to


register double-digit growth once again driven by an anticipated increase in foreign visitors and the recent opening of its new Seoul Gimpo International Airport shops (January). “We achieved our largest ever


sales revenue last year while South Korea’s duty free market as a whole grew rapidly by 33% year-on-year,” Taeho Kim, Executive Vice President of Hotel Shilla Co Ltd’s Travel Retail Business Korea Division, tells TRBusiness. “Our domestic sales were


MAY 2019


US$4.3bn in 2018; that’s 38% growth compared to 2017 and our largest ever sales and profit in the company’s history.” Korea is certainly a competitive


environment for duty free and travel retail operators, forcing numerous companies to look for opportunities outside of Korea and Asia. According to Kim, Shilla boasts the largest overseas operations of all its domestic rivals. “2018 was very memorable as


we achieved $1bn sales from our overseas branches,” he says. “Including our overseas sales in


Hong Kong and Singapore, our total revenue reached $5.3bn last year. “The main reason we are able to


achieve this sales revenue is through customer-focused marketing; also, we opened our Incheon Airport Terminal 2 stores last year and they have shown a profit.” This year has been positive so


far, according to Kim, despite his concerns that new Chinese Government regulations regarding e-commerce could impact The Shilla Duty Free’s overall sales.


“We started with some concerns


in January and February as the Chinese Government introduced its e-commerce law,” he explains. “We were expecting sales to


Chinese customers to slow, but it has not happened yet.”


Seoul and Jeju renewals This year is a crucial one for Shilla as the company is required to renew government licences to operate its two largest domestic stores; the flagship Seoul downtown shop and its Jeju downtown shop.


“We started with some concerns in January and February as the Chinese Government introduced its e-commerce law… We were expecting sales to Chinese customers to slow, but it has not happened yet.”


Taeho Kim, Executive Vice President of Hotel Shilla Co Ltd’s Travel Retail Business Korea Division


TRBUSINESS 83


Above: The Shilla Duty Free Body&Hair zone.


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