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'Saint Laurent' duty-free products sold at a discount on the 3rd at Shinsegae International's online mall 'SI Village'. Photo by SI Village capture
[Asia Economy Reporter Cha Min-young] Among the duty-free shops that have started selling long-term inventory, Shinsegae Duty Free, which took the lead, succeeded in initial sales, drawing attention to the inventory sales of Lotte Duty Free and Shilla Duty Free, which are about to start selling.
According to Shinsegae Duty Free on the 4th, about 93% of approximately 200 products from four luxury brands?Balenciaga, Bottega Veneta, Saint Laurent, and Valentino?sold out within a day since sales began on the morning of the 3rd. At Shinsegae International SI Village, where online pre-orders were conducted, customers eager to purchase luxury goods flocked from early morning, causing the website to display error messages at times due to heavy traffic.
The total number of visitors to SI Village that day reached 150,000. Among the duty-free long-term inventory items with discounts of up to 50%, popular products sold out early in the morning. Despite drawbacks such as no after-sales service, the low prices and variety of items attracted nationwide interest. Contrary to initial expectations, the participation of well-known brands favored by women in their 20s and 30s, the main consumers of luxury goods, was also cited as a factor in the success. On SSG.com’s Shinsegae Mall, sales of Fendi and Givenchy products began on the 3rd and will continue for 12 days until the 14th.
Buoyed by Shinsegae Duty Free’s success, expectations have risen for Lotte Duty Free, which will start selling duty-free inventory in three weeks. Lotte Duty Free will conduct sales during the 'Korea Together Sale' period from June 26 to July 2. Unlike Shinsegae Duty Free, which conducted online pre-orders, Lotte Duty Free will sell products offline at Lotte Department Store and outlets. Lotte Shopping will directly purchase and sell miscellaneous goods such as bags, wallets, shoes, and accessories from 10 brands worth about 20 billion KRW from Lotte Duty Free. Since customers can purchase inventory duty-free items immediately without waiting, an 'open run'?lining up at the department store opening time?is expected.
Shilla Duty Free plans to start selling inventory this month, but specific sales methods and participating brands have not been finalized. Hyundai Department Store, a latecomer in the duty-free industry, is unlikely to participate in inventory sales as it has relatively little long-term inventory.
The sale of duty-free inventory 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 from April 29. This is one month earlier than the initially expected July. Assuming a 20% reduction of long-term inventory, about 160 billion KRW in liquidity resources is expected to be secured.
An industry insider said, "With the allowance of duty-free inventory sales, duty-free shops facing a crisis of collapse have been able to catch their breath for a while," adding, "Some luxury brands maintain that discount sales are difficult due to image and global policies, but active cooperation is needed in the spirit of coexistence."
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