SOUTH KOREA: SHILLA DUTY FREE “This year we have to renew our
Seoul and Jeju downtown licences, but I’m sure we can acquire these licences,” confirms Kim. “The Seoul licence will be renewed
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in July and in October we have the Jeju licence renewal. These will be for the second five-year term. Korea Customs Service (KCS) will evaluate the quality of our services and our operational capacity.” Ahead of the evaluation process,
Shilla is upgrading customer facilities in both shops while it also prepares to build a new larger flagship store in central Seoul. “We are busy renovating our
Seoul downtown and Jeju downtown stores,” explains Kim. “In Seoul we have invited many
new brands to our shop, especially Japanese beauty brands in our special cosmetics zone which is called @Cosme. “Also, we are trying to introduce
Japanese beauty devices… They are becoming more popular and will complement our existing perfume and cosmetics offer.” The company has already installed
several new corner displays for beauty appliances, which are growing in popularity particularly with Chinese customers. In addition to beauty appliances,
Shilla is currently trying out new South Korean fashion brands in its Seoul downtown store basement floor level. “We are testing Korean beauty
devices and fashion brands for Chinese customers,” confirms Kim. “We can see potential with beauty
The Shilla Duty Free’s @Cosme store at the Seoul downtown complex.
devices and the possibility for sales to grow well. “Chinese customers are looking
more for these items and are very interested in brands like Foreo and ReFa. “Sales of our beauty devices, for
example, are more than US$1m per month in the Seoul store,” says Kim. “We sell mainly facial toning appliances, but also ones for body toning and haircare.”
Beauty conversions Expanding the retail space for beauty is not only a focus for Shilla in Seoul. On Jeju Island, the company is converting unused space on the top floor of its four-storey downtown duty free store into a new retail display area for small and medium South Korean beauty brands. “We are having our Jeju store
This content is for subscribers only. Shilla Tipping registers 10 million visitors
extended to provide a better shopping environment and to discover promising small and medium brand labels,” explains Kim.
second and third floors will be given to global brands as they have trouble with the limited space available,” adds Kim. “We will also widen the customer walkways.”
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clear demand for the service, Shilla will soon make the app available to Chinese and other nationalities. Accessed through Shilla Duty Free’s
www.trbusiness.com/subscriptions
Online sales form an important part of Shilla’s growing domestic downtown business and the company’s recently launched ‘Shilla Tipping’ service is proving to be very popular with South Korean customers. Encouraged by a
MAY 2019
mobile phone app, the Tipping blog is a consumer product review service that allows users to exchange product news and opinions with other app users. Tipping blog users receive cash back
if other users buy products through their Tipping blogs and bloggers also receive up to 3% commission on purchases of duty free goods that other users make through their postings.
Launched in September, Shilla says the app registered 10 million visitors in just a few months after it was first launched last year. Currently, about 70,000 users access
Tipping daily through the Shilla Duty Free mobile phone app and website. In addition to attracting a growing
number of Shilla Duty Free online customers, the Tipping service appeals to brands, particularly cosmetics companies, many of whom now want to advertise their brands and products by sponsoring the Tipping blog service.
TRBUSINESS 85
In my personal opinion there are too many duty free licences, especially for Seoul… Some shops have trouble luring customers and making a profit; several SME duty free operators are already suffering losses.”
Taeho Kim, Hotel Shilla Co Ltd’s Travel Retail Business “We currently use three-and-
a-half floors, but now we are expanding into the other half of that floor growing our total retail space by 10%. We can invite more brands to that space. Shilla plans to place the small
and medium Korean perfume and cosmetics brands – along with some Jeju souvenir brands, cosmetics and food items – on the top floor. “Extra space created on the
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