October Duty-Free Store Sales Drop to 1.6 Trillion Won... "Impact of Decrease in Foreigners"

On the 30th, amid ongoing concerns about the COVID-19 Omicron variant, overseas arrivals are waiting at Terminal 1 of Incheon International Airport. Photo by Moon Honam munonam@

[Asia Economy Reporter Yuri Kim] Domestic duty-free shop sales fell to the 1.6 trillion KRW level last October. This was due to a decrease of more than 160 billion KRW in foreigner sales, which account for over 90% of domestic duty-free shop sales amid the COVID-19 situation.

According to the Korea Duty Free Shop Association on the 1st, domestic duty-free shop sales in October amounted to 1.6235 trillion KRW, down 8.05% from 1.7657 trillion KRW in the previous month. In September, sales exceeded 1.7 trillion KRW for the first time since February last year, when the impact of COVID-19 began to intensify, but the momentum weakened within a month. Since sales halved from 2.0248 trillion KRW in January last year to 1.1026 trillion KRW in February, monthly sales at domestic duty-free shops have remained in the 1 to 1.5 trillion KRW range.

The biggest factor affecting October sales was foreigners. Although the number of foreign visitors increased compared to the previous month, the average spending per customer decreased. The number of foreign visitors in October was 51,503, up from 47,921 in the previous month. However, foreigner sales dropped by more than 160 billion KRW from 1.7025 trillion KRW in the previous month to 1.5349 trillion KRW in October.

Domestic visitors increased in both number and sales. The number of domestic visitors rose significantly from 463,263 in the previous month to 625,338 in October. This is the highest number of domestic visitors since 1,043,513 in February last year, when the impact of COVID-19 began. Sales also increased from 63.2 billion KRW in the previous month to 88.6 billion KRW in October. This is also the highest figure since 129.1 billion KRW in February last year. However, compared to 2.22 million domestic visitors and 323 billion KRW in sales in January last year, just before COVID-19, these numbers remain modest.

The duty-free industry had high hopes for the phased return to normal life (With COVID) that began last month, but concerns are growing again as daily confirmed cases surged to the 5,000 range and the risk of the Omicron variant virus has increased. An industry official said, "There were high expectations for improving the sales structure, which had heavily relied on Chinese peddlers (ttaigong) sales amid the COVID-19 situation, as signs of overseas travelers returning appeared, but currently we are closely monitoring the situation."