TOP 10 OPERATORS 2: LOTTE DUTY FREE 2 “I


Lotte vows to get ‘right back on track and outperform competitors’ after Covid-19


A stellar 2019 resulted in Lotte Duty Free expanding into Oceania, thriving in Vietnam and capturing the all-important Changi Airport liquor and tobacco contract. The focus now is on setting the standard in the post Covid-19 era, as Andrew Pentol discovers.


t’s very difficult to have a clear vision at the moment, however we are preparing


for the post-Covid-19 era.” These were the words of a Lotte


Duty Free spokesperson when asked by TRBusiness to outline the company’s DF&TR vision. The Korean retailer enjoyed a


‘miraculous’ 2019, generating total DF&TR sales of KRW9.93 trillion/$8.5 billion. Breaking down the total sales figure, KRW9.35 trillion/$8.1 billion came from domestic airport and downtown stores and KRW573.80 billion/$497.27 million from its overseas businesses. Such a remarkable performance


last year, despite difficult market conditions must now feel like a distant memory for the Korean powerhouse, which is busy planning for the future. The spokesperson says: “We


are doing what we can and have introduced concepts such as the industry-first Smart Store, which opened in March and held a live broadcast last July. Lotte is confident things will


get ‘right back on track’ after the Covid-19 pandemic. “We will outperform competitors thanks to what we have prepared.”


Future remains unclear With sales in the first half of 2020 plummeting around 50% year-on- year (Q1 sales fell from KRW1.4tn in the same period last year to KRW872.7bn), Lotte declined to make predictions for the second half of the year. In the meantime, business has


been maintained by strong volumes from large-scale daigou resellers. “We are doing our best to maintain strategic partnerships with Chinese shuttle trading companies,” the spokesperson says. Additionally, Lotte has been selling


OCTOBER 2020


surplus stock accumulated during the Covid-19 crisis in duty paid markets through local channels. “We are not generating a large portion of sales from this, but the deregulation of the market by the Korea Customs Service is helping us offload unsold stock.”


Global No.1 ambition Lotte has made no secret of its intention to become a global DF&TR leader in the coming years, but is this a realistic objective in the current climate? “The whole industry is suffering from unprecedented levels of uncertainty and financial difficulties,” adds the spokesperson. “Even if we achieve our vision of


becoming the world’s best travel retailer, it will be less meaningful.” Before the pandemic manifested


itself towards the end of 2019, Lotte was at least able to make some significant business breakthroughs. In addition to enhancing its


overall profit structure last year, Lotte consolidated its position as


The Korean retailer unveiled the industry's first Smart Store earlier this year.


TOP 10 OPERATORS 11


the world’s leading e-commerce and downtown DF&TR player. It also demonstrated its ability to lead the global market through the successful acquisition of stores in Oceania, the capture of the liquor and tobacco contract at Singapore Changi Airport and business expansion in Vietnam.


Above: Sales at Lotte’s Hanoi Airport store rose +76% in Q4 2019 compared to the first three months of operations.


“We are doing our best to maintain strategic partnerships with Chinese shuttle trading companies.”


Spokesperson, Lotte Duty Free


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48