September Duty-Free Store Sales Reach 1.484 Trillion Won... Highest Since COVID-19

On the 14th, amid the ongoing COVID-19 pandemic, the international terminal at Gimpo International Airport in Gangseo-gu, Seoul, is deserted. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Seungjin Lee] Domestic duty-free shop sales in September reached 1.484 trillion KRW, marking the highest level since the outbreak of COVID-19. Duty-free shop sales have been rising for five consecutive months after hitting a low point in April.

According to the industry trends announced by the Korea Duty Free Shop Association on the 29th, domestic duty-free shop sales in September increased by about 40 billion KRW from the previous month (1.4441 trillion KRW) to 1.484 trillion KRW.

With the end of the summer vacation season in August, the number of visitors significantly decreased. Domestic visitors numbered 358,000, and foreigners 66,000, down approximately 160,000 and 9,000 respectively from the previous month.

Domestic sales recorded 431.3 billion KRW, down 170 billion KRW from the previous month due to the decrease in visitors. On the other hand, foreigner sales increased despite the drop in visitors, reaching 1.44 trillion KRW. This is about 60 billion KRW higher than the previous month and the highest since the spread of COVID-19 in February.

Duty-free shop sales sharply declined from 2.02 trillion KRW in January to 1.1 trillion KRW in February, nearly halving. After hitting a low of 986 billion KRW in April, sales have been on an upward trend for five consecutive months.

However, the duty-free industry is still facing difficulties. It remains highly dependent on Chinese 'ttaigong' (informal traders), and sales levels are still far below those before the COVID-19 outbreak. Additionally, the global COVID-19 pandemic tax situation remains uncertain, making it impossible to establish long-term business plans.

Meanwhile, the Korea Customs Service has decided to indefinitely extend the market sale of inventory duty-free goods. This measure aims to support the duty-free industry, which has been experiencing prolonged sales declines due to COVID-19, by extending the import clearance of inventory duty-free goods until separate guidelines are issued. Originally, the Customs Service planned to allow market sales of inventory duty-free goods only until the 28th of this month.

The 'third-party return,' where duty-free operators transfer duty-free goods to a third party rather than the purchaser, has been permitted to be extended until the end of the year. As an alternative to third-party returns, the Customs Service plans to review within this year a measure allowing duty-free goods to be shipped overseas at designated delivery points only to foreign buyers pre-registered with customs.