Four Major Brands Reach 80% Sales Rate by 1 PM
Temporary Access Disruption Incident
SSG.com Continues Sequential Brand Releases
[Asia Economy Reporter Cha Min-young] Shinsegae Duty Free's online sales strategy for duty-free inventory achieved meaningful results on the first day. Maximizing discounts and diversifying options in line with the original goal of clearing long-term inventory are seen as key factors for success.
According to Shinsegae International on the 3rd, as of 4 p.m. that day, about 90% of 200 products from four brands sold on the official online mall 'SI Village' website were sold. The participating brands are four: 'Balenciaga,' 'Bottega Veneta,' 'Saint Laurent,' and 'Valentino,' with discounts up to 50%. After sales began at 10 a.m. that day, the sales rate exceeded 80% by 1 p.m., just three hours later, raising expectations for a 'sell-out' on the first day. Some items may be restocked in small quantities.
At the same time, Shinsegae Mall within SSG.com is also recording a sales rate exceeding 30%. Shinsegae Mall is conducting a pre-sale of 85 inventory items, including 42 types of 'Fendi' and 43 types of 'Givenchy,' through the duty-free product special event 'Smart Luxury Shopping.' The main items are accessories such as bags, hats, and wallets, with discounts up to 47%.
Both online malls receive only the quantities confirmed for sale through pre-orders from Shinsegae Duty Free, go through customs clearance, and then deliver to customers. However, since prices are set at the minimum level without profit margin, after-sales service (AS) is not available.
On that day, right after sales started at 10 a.m., about 150,000 customers accessed simultaneously, causing the server to crash. Despite server expansion, traffic increased more than 20 times compared to usual, leading to the server crash. It was restored around 11:20 a.m.
Other duty-free shops will also start sales online and offline within this month. Lotte Duty Free will sell products from about 10 brands at four Lotte Department Store locations and outlets during the 'Korea Together Sale' from June 26 to July 2. Separate overseas luxury brand sales events will be set up mainly at department stores that do not currently carry luxury brands. The volume is about 20 billion KRW, focusing on accessories such as bags, shoes, and miscellaneous goods.
Shilla Duty Free plans to start selling inventory within this month. Hyundai Department Store Duty Free has not decided whether to sell inventory. Since it is scheduled to enter Incheon International Airport Terminal 1 around September, securing inventory is urgent, and due to its short business history, it holds relatively less inventory, resulting in a lighter inventory burden.
This duty-free inventory sale is the result of public-private cooperation between the Korea Customs Service and duty-free shops. It has been just over two months since the Korea Customs Service temporarily allowed domestic sales of long-term inventory until October 29, starting April 29. This is one month earlier than the initially expected July. Assuming 20% clearance of long-term inventory, about 160 billion KRW in liquidity resources are expected to be secured.
An industry insider said, "We view the prompt measures taken in the difficult duty-free industry situation positively," adding, "Luxury brands should actively cooperate and coexist with the duty-free market amid the domestic situation struggling with the novel coronavirus (COVID-19)."
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