Tourism Spurs Duty-Free Shop Boom

Big conglomerates will open several more duty-free shops in Seoul next year as record numbers of Chinese tourist continue to pour into the country.

The government has decided to license at least two new duty-free shop operators in Seoul to meet burgeoning demand, according to the Ministry of Strategy and Finance on Monday.

There are already six large duty-free shops in downtown Seoul, run by Lotte, Shilla and Dongwha, which rack up a combined total of about W2.5 trillion (US$1=W1,114) in annual sales. The main Lotte duty-free shop in Sogong-dong alone recorded sales of W1.2 trillion last year.

The government has previously been reluctant to let conglomerates open yet more duty-free shops so they do not get in the way of small and medium-sized firms, but now it seems to have changed its mind given the sheer size of the market.

Lotte and Shilla already have an 80 percent combined market share.

The government is also considering licensing one more duty-free shop in downtown Busan and in Jeju. Both already have two.

"We need to open more duty-free shops as the downtown duty-free shops are stretched to capacity due to a surge in foreign tourists," a ministry official said. "More duty-free shops will rejuvenate the tourism industry and boost domestic consumption."

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