TOP 10 OPERATORS 2018 4: SHILLA DUTY FREE
speed. The Know-how accumulated from operating in other airports worldwide meant the Beauty&You concept was profitable almost from the outset. “The Hong Kong store is full
of elements which can instantly capture passengers’ attention,” the Spokesman says. “These include interactive attractions, a curated brand assortment and eye-catching visual merchandising design. “All the elements were carefully
planned and implemented to work jointly under HKIA’s unique retail settings and customer base following an extensive study.”
Successful 2017 Shilla ultimately enjoyed a successful 2017 despite the impact of THAAD and in many ways has continued where it left off in 2018. In Q2 2018, for example, Shilla reported a +53% rise in consolidated revenue to KRW1,05tn ($940m) in the second quarter of the year from KRW691.3bn ($619m) in Q2 2017. Operating profit on a consolidated
basis rose a massive +680% in Q2 to KRW64bn from KRW8.2bn in Q2 2017. Hong Kong aside, it has certainly
been a productive start to the year for Shilla, which officially launched its Incheon T2 operations in January, Jeju International Airport liquor and tobacco store in June, and new English online shop (August). “The Shilla Duty Free managed
outstanding business in the second quarter and first half of 2018,” says the Spokesman. “It’s a thrilling performance and the company is pretty confident with the result. “Taking into to account the current
state of the South Korean travel retail industry, such performance reflects how The Shilla Duty Free managed the turbulent situation.” Further reflecting on its Q2 results,
the Spokesman says the retailer is very happy by the ‘outstanding performance’. He says: “The Shilla Duty Free generated sales of over KRW1tn for two consecutive quarters, the highest quarterly sales in the history of the company. “Shilla’s performance exceeded
market consensus and according to local analysts, thrilled shareholders.”
OCTOBER 2018
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Looking ahead to the second half of the year the Spokesman adds: “In the coming second half, there is the peak season for South Korean customers who are looking forward to the nation’s biggest holiday in autumn. “Also, Chinese demand is expected
to grow before their national holiday in October. Shilla also expects revenue improvement in Hong Kong following the grand opening in June. Meanwhile, the two new airports
stores in Jeju and Seoul Incheon International Airport (Terminal 2) are exceeding expectations. Shilla’s perfume & cosmetics store at Incheon T2 is the largest P&C outlet in the terminal and generates the strongest sales of all operators at the location. “Jeju International is attracting
outbound passengers from the airport generating sales beyond The Shilla Duty Free’s estimation,” the Spokesman continues. “South Koreans and Chinese are
the biggest spenders at Incheon T2, while Jeju International Airport mostly welcomes Chinese passengers. Cosmetics remain the dominant category at both airports boosted by a high demand for skincare and make-up brands.”
New online store The launch of an English language version of its online store was another significant landmark. Since introducing the service in
“Downtown sales (including online) and airport channels increased, but the downtown channel returned a stronger performance than the airport equivalent, contributing the most to Shilla’s annual performance.”
Shilla Duty Free Spokesman
and Japanese (2017). The aim is to provide a convenient online duty free shopping experience to more customers. “Online is growing quickly,” he
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Korean in 2000, Shilla Online Duty Free has expanded its language coverage to include Chinese (2014)
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emphasises. “The speed of growth is outstanding and the channel bears untold potential. The importance of online can be explained without its massive growth. “Thanks to sales generated
from millennials, online is already significant enough to be classed as an independent channel along with airport and downtown.
Above: A new online English store service was recently launched.
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Contact:
janice@trbusiness.com
The new Beauty&You concept officially opened on 28 June following the soft opening of six beauty outlets in December 2017.
TOP 10 OPERATORS 33
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