NEWS ROUND-UP Wuhan reopening a ‘sign of hope’ Korea ‘still owned’
by ‘the big three’ South Korea’s duty free sector grew at a CAGR of +27.3% between 2016 to 2019 and doubled in size during the same period to $21.3bn in 2019. According to Center 4 Duty Free – a new
series of monthly reports analysing South Korea’s duty free market – Chinese tourists have been the driving force behind the performance, rising by 24.8% in 2019 year- on-year to around six million. A highly competitive downtown duty free
segment witnessed 37% sales growth last year to KRW21tn/$18bn and accounted for 84.6% of total Korean duty free sales. At $15.4bn, sales from Seoul’s downtown
duty free shops accounted for a 85.5% share of total downtown duty free sales. Large corporations such as Lotte Duty
Free, The Shilla Duty Free and Shinsegae Duty Free (otherwise known as ‘the big three’ in Korea) accounted for a 83.7% share of the $15.4bn. However, it is online sales – permitted
only through downtown stores – that have grown the fastest in recent years. Korea’s online duty free sales surged 956.5% from KRW794.4bn/$650m in 2014 to KRW7,598.1bn/$6.2bn in 2019. Online sales of the big three accounted
for 88% of total online sales, KRW 6,684.4bn/$5.5bn. “The online duty free business can be
said to be owned by the big three players,” said C4D. “Lotte Myeongdong, Shilla Seoul,
and Shinsegae Myeongdong [the flagship stores from the big three] register the highest online sales.” Full analysis can be found on p77.
calvinklein.com/fragrances
Lagardère Travel Retail has declared the re-opening of Wuhan Tianhe International Airport for domestic flights on 8 April as a significant milestone and ‘big sign of hope and optimism’ for the company, which has multiple airport operations across China. The reopening of the airport, where
Lagardère runs the Terminal 3 master retail and foodservice concession covering around 90 outlets, coincided with the emergence of the city from a 76-day lockdown on Monday 6 April.
The lockdown was imposed in January due to the spread of the coronavirus (Covid-19). China itself published no deaths from
the virus on Tuesday (7 April) for the first time since it started publishing daily figures in January. Speaking exclusively to TRBusiness on the
eve of the re-opening of Wuhan Airport, Eudes Fabre, CEO, North Asia, Lagardère Travel Retail said: “The symbol of Wuhan Airport reopening goes above and beyond any prediction or forecast of how revenues will be. “The reopening is proof that everything
which closed and disappeared will reopen and come back. You hear people saying they will not travel anymore and airlines suggesting they do not require any more planes. People are also saying they will no longer
eat out as they have learnt to cook in quarantine, but the point to remember is that life will return to normal.”
Dubai Duty Free’s stores to remain closed
While Colm McLoughlin is unsure when Dubai Duty Free’s stores will reopen, after closing on 25 March, he does expect that they will remain closed for at least another month (speaking in April). He also divulged that since the company
closed its stores, revenue is down Dhs880 million/$240m compared with this time last year. In an episode of ‘Adapt & Survive’,
McLoughlin confirmed that Dubai has increased the lockdown for its citizens, but he expects it to continue for a lot longer as the world faces a race against time to find a vaccine. “One hundred and eleven of our DDF
staff have tested positive for the virus. Three are in hospital and 58 are under the department of health’s isolation. We have been able to test 3,500 members of our staff so far.” [Correct at press time - Ed]. He revealed that the company is still
making about Dhs100,000/$27,000 each day through the sale of tickets for its ‘Finest Surprise’ and ‘Millennium Millionaire’ draws. “We’re taking about Dhs100,000
dirhams every day, but we should be taking Dhs20 million,” said McLoughlin. “But we’re living with it. All our staff are
on standby, they’re all being paid in full. We have no prediction of how long this is going to go on for. If I was to guess I would say that we’re certainly going to be closed for the next month or so.”
©2019 Calvin Klein Fragrances Corporation ckone™
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