SOUTH KOREA: HYUNDAI DUTY FREE
“It’s a risky time to invest because of the coronavirus situation, but when we look ahead we predict a bright future. We are investing now and when the situation is back to normal we can maximise our efficiencies.”
Cho Jun Ki, Hyundai Department Store Duty Free
However, when it comes to beauty, customers are drawn to the same brands in the COEX and Dongdaemun stores. Cho said: “We have mostly
levels, while Doosan Corporation’s offices occupy the upper floors. “[The goal of] our Dongdaemun
store is to attract not only South Korean customers but Chinese and other foreign visitors in the City Hall downtown area,” explained Cho. “Also, some of our Hyundai COEX
department store and duty free shop customers visit Dongdaemun to see our new shop.” Seoul’s Dongdaemun area is
known for its 24-hour shopping malls that attract South Korean shoppers, along with a wide range of other nationalities. “The biggest difference between
our COEX and Dongdaemun duty free stores is that Dongdaemun has visitors of many different nationalities,” clarified Cho. “Our Gangnam COEX shop appeals
mostly to local Korean customers and has more free independent traveller [FIT] customers; the majority of COEX fashion sales can be attributed to Gucci, Prada and other luxury brands. “Dongdaemun is more about
young fashion – Dongdaemun is for mid-tier portable brands.”
the same cosmetics brands in Dongdaemun as COEX; for example, L’Oréal and Estée Lauder. Dongdaemun’s perfume and cosmetics demand is similar to our COEX store. Duty free stores thrive on perfume and cosmetics sales.” Currently, the majority of
perfume and cosmetics goods are sold to Chinese daigou traders at the Dongdaemun store. However, Hyundai Duty Free expects this will change when trading conditions return to normal. “Chinese daigou traders were
Doota Duty Free’s major customers, but we will try to balance our daigou shoppers with more foreign FIT and South Korean customers,” said Cho. “It’s not so easy right now, but
when the situation is back to normal we expect to reach the balance we seek. Regular South Korean and foreign FIT customers are hard to attract right now.”
Daigou appetites satisfied Sales in the new Dongdaemun store reflect daigou customers’ brand preferences for the moment. “In-store sales are bigger than
online sales at our Dongdaemun store right now,” confirmed Cho. “It is mostly international perfume
and cosmetics brands which are selling now. They represent a 95% share of total P&C sales; but now is
not a normal situation, so it’s hard to evaluate current perfume and cosmetics sales.” Hyundai Duty Free continues to
carry some fashion brands which were previously stocked with Doota Duty Free, including Michael Kors, Longchamp, Ralph Lauren and Max Mara, among others. Cho
pointed out that the
Dongdaemun store’s brand selection will begin to change as more new brands are introduced. “We have Kenzo opening in April
and Marc Jacobs as well,” said Cho. “We wanted to leave some existing
well-performing brands in the store; we also want to connect our future Incheon Airport T1 fashion boutiques to our Dongdaemun store for brand synergy.” Further renovation work is
planned in the Dongdaemun store as new brands are added to the shop’s collection. “We plan to renovate our
Dongdaemun store when we have better brands,” said Cho. “We have changed some aspects… including the upgrading of instore signage, for example. “Our first floor needs better
fashion brands so we will probably change the boutiques one by one. We are tenants so we cannot change the exterior of the building.” Hyundai Duty Free’s ambitious
retail expansion plans recently received a further boost when the company’s bid was selected by Incheon International Airport Corporation (IIAC) for the Terminal 1 West Wing fashion and miscellaneous goods licence (DF7), which consists of six outlets covering 2,326sq m in area. Cho noted that Hyundai Duty
Free is also interested in bidding for The Shilla Duty Free’s T1 West Wing perfume and cosmetics licence (DF2) – which did not attract a single first -round bid – and the East Wing fashion and miscellaneous goods license (DF6). Hyundai was the sole bidder
Gucci within Hyundai Duty Free’s COEX store. 54 TRBUSINESS
in the first round and IIAC is expected to retender the two concession packages in the near future. “We may participate when the new DF6 bid announcement
MAY 2020
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