TOP 10 OPERATORS 3: SHILLA DUTY FREE


climate could help. Suggestions that the South Korean


Government may look to raise the duty free purchase threshold and tax exemption cap from $3,600 to $5,600 towards the end of this year would be welcomed by the retailer. “It is expected to have a substantial


impact on vitalising Korean customers duty free purchases,” claims Taeho Kim. While the current tax exemption


limit on purchases remains unchanged, TRBusiness understands there is a proposal in the offing to raise it from US$600 to US$800. Fresh views from South Korea’s


Government on the matter had not surfaced at the time this report was written (August), but the general consensus on the proposals inferred from multiple Korean industry sources in recent months is largely positive. However, a concurrent rise in the tax exemption cap alongside the purchase ceiling appears to be favoured. “Raising the threshold for duty


free purchases may have a positive impact on Korean’s shopping behaviour in domestic duty free stores,” comments Kim. “It is likely that this would influence


more on luxury fashion and watch/ jewellery categories which have more high-priced products rather than perfume & cosmetics.”


Storm in HK Elsewhere, Shilla celebrated in July this year the first anniversary of its Beauty&You stores at HKIA with a variety of promotions and activities. Changha Shin, Managing Director, Shilla Travel Retail Hong Kong Limited tells TRBusiness that Shilla has added to the 60 new brands launched when Beauty&You inaugurated last year. Many of these are new to HKIA


as either permanent fixtures or exclusive pop-ups, from the likes of Balenciaga Eyewear and House 99 to Filorga Olens, Nars, and Gucci makeup. “We currently have over 200


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The Shilla Duty Free Seoul downtown Store.


ranging from Japanese premium skincare to independent fragrances. For the fashion category, we are looking to invite affordable to entry- level luxury brands to expand our customer profile.” But at press time, Hong Kong


continues to face stiff challenges. Shilla – like fellow retailers CDF-Lagardère


and Gebr.


Heinemann – were staring at a swell of demonstrations and anti- government protests in the terminals in August, reflecting wider public antagonism in Hong Kong in recent months against the administration’s now suspended extradition bill, which enables suspects to be sent to mainland China for trial. In August, the Airport Authority


the time that the retailer was ‘slowly gliding back into normality’ as its teams galvanised and followed the airport authority’s guidance. “Indeed our stores in some


of Hong Kong (AAHK) cancelled flights on two consecutive days with protests descending into skirmishes with the police. A source at Shilla told TRBusiness at Official Partner


for both HKIA and Hong Kong at large. We trust that Hong Kong will be able to rise above the challenge and regain its dynamism to benefit all parties.” At the time of writing, protests


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in the airport appeared to have dampened but demonstrations remained vociferous across the city. While mostly anecdotal, Hong


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Kong’s travel retail sector may continue to experience headwinds as a result; international media have even pointed towards a wider economic recession and existential crisis taking place in the city, although that remains to be seen. «


“We trust that Hong Kong will be able to rise above the challenge and regain its dynamism to benefit all parties.”


Taeho Kim, Executive Vice President, Hotel Shilla Co Ltd, Travel Retail Business, Korea Division


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instances had to phase out operations as many flights were cancelled and as tension rose,” according to the source. “Yet our staff showed exemplary


resilience to follow instructions either reporting duty or vacating stores. This was a great support. “As a principal, Shilla put the


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brands available at our stores,” he confirms. “At the moment, we are in


discussion to launch over 10 new-to- HKIA brands before the end of 2019,


OCTOBER 2019


safety of the team at the top of its agenda. We did all it took to ensure our people would be unharmed and remain positive to serve our customers in spite of circumstances. “Rescheduling flights and


reprogramming passengers’ travel is hard work, so we are hopeful that the situation continues to normalise


Consolidated travel retail revenue rose by 16% in Q2 year- on-year with a strong showing from Shilla's downtown operations. Source: Hotel Shilla.


TOP 10 OPERATORS 27


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