TOP 10 OPERATORS 2: LOTTE DUTY FREE
“The Lotte Duty Free Da Nang downtown store will be a new foundation for the tourism industry in Da Nang.”
Suk Won Park, CEO, Lotte Phu Khanh Duty Free
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excellence that is being introduced to Australia and New Zealand, working side-by-side with our local colleagues to better understand the unique wants and needs of people travelling through the region from all nationalities.”
Lotte’s capture of JR/Duty Free’s Australasian businesses includes on-airport stores in Brisbane, Melbourne, Darwin, Wellington and Canberra and a downtown outlet on Swanson Street in the Central Business District of Melbourne. The agreement was signed last
year, and the transaction was complete at the beginning of 2019. A few months later, the Korean
retailer marked its expansion into the region with the unveiling of re- branded Lotte Duty Free stores at Brisbane International Airport. Lotte said at the time: “Australia
has demonstrated significant growth of over 10% in terms of incoming tourists in recent years. “The ‘2019 Spring Tourism
Forecast’ published by Ctrip, the largest online travel agency in China, also states Australia is one of the most favourable international travel destinations for Chinese tourists during the New Year period.” Speaking during his first visit to
Australia, Kap Lee, CEO, Lotte Duty Free said: “Successfully entering Oceania is the next step towards Lotte Duty Free becoming the world’s number one travel retailer and the most influential in the region. “We have almost 40 years of retail
Stabilisation goal In conversation with TRBusiness a couple of months after the Brisbane launch event, Lee said the retailer was looking to leverage its online shopping presence in Australia. “This will help Lotte hit its $200m sales target during the first year of trading in the Oceania region,” he said. “E-commerce retail in Australia
is booming, but on the other hand, e-commerce travel retail is not so developed in this country.” “This year’s goal of business
stabilisation in the Oceania market is looking pretty successful so far. “We will focus particularly
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on developing the e-commerce business. Lotte Duty Free has also acquired JR/Duty Free’s online store, so we are technically running two online stores.” This $200m sales target remains
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achievable, according to the spokesperson who comments even more recently: “The Oceania market has relatively small sales volumes right now but has big growth potential. “Also, there are many global
operators in the region, so it’s very competitive. This is a big chance for us to test ourselves in terms of how well we can operate and compete.
“The Oceania market is a stepping stone towards extending our business to the US and Europe.” Foreign expansion closer to
home, however, appears to be a priority at the moment, with Lotte battling fierce Korean rival Shilla Duty Free and German operator Gebr. Heinemann for the Singapore Changi liquor and tobacco contract. This will be vacated by long-
standing incumbent DFS Group in June 2020, which decided not to proceed with a two-year contract extension agreed in 2018. Equally surprising was DFS Group’s
decision not to participate in the new Changi Airport Group tender for the 18-store liquor and tobacco concession, which was launched on 4 June 2019. The deadline for submissions was 26 August 2019. Currently operating 12 airport
shops worldwide, including a liquor and tobacco shop at Seoul Incheon Airport Terminal 2, capturing the Singapore Changi liquor and tobacco contract would be a major coup for Lotte and further signal of intent. Acknowledging the strong
sales potential associated with the concession, the spokesperson remarks: “Success in the tender would enable us to get one step closer to our ambition of becoming the world’s best travel retailer.”
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For more information contact:
Janice@trbusiness.com Lotte unveiled its re-branded stores at Brisbane Airport earlier this year. 20 TOP 10 OPERATORS
Overseas expansion plan Whether it is ultimately successful in the Singapore Changi tender or not, further foreign expansion is absolutely essential if Lotte Duty Free is to achieve its ambitions, as the Lotte spokesperson confirms. “There are many options for foreign
expansion, such as opening new stores, winning airport concessions and mergers and acquisitions. “Lotte duty free is not seeking
implicit expansion, but is willing to consider any opportunity that can generate revenue. “Furthermore, Lotte Duty Free
will seek business diversification, not only focusing on duty free offline business, but also developing tax free and e-commerce business.” It has been a case of onwards
and upwards in terms of its overall DF&TR business this year. “Our long-term strategic plan is
OCTOBER 2019
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