Shinsegae readies itself for duty-free businessShinsegae Group received approval from the Korea Customs Service to go into the duty-free business.
The retail giant also changed the name of its recently acquired Paradise Duty Free Shop to the Chosun Hotel Shinsegae Duty Free Shop.
The company wants to utilize the power of its two brands: the Shinsegae Department Store and the Westin Chosun Hotel.
On Wednesday Shinsegae finished all administrative procedures with the Korea Customs Service to open the business.
Shinsegae will start aggressive promotion and advertising from January.
“Shinsegae’s duty-free shop will hold various product exhibitions from the beginning of next year,” said a company spokesperson. “Aggressive marketing is essential to gain recognition from customers.”
Shinsegae’s entry could bring a big change to an industry dominated by the Lotte and Shilla groups.
“An immediate shift of power in the industry is unlikely as the market share of Paradise Duty Free Shop was in seventh place,” said an industry source. “But should Shinsegae’s retail network unleash its power, the duopoly between Lotte and Shilla in the duty-free market will be reshaped into a three-way battle in the long term.”
Currently, Lotte Duty Free has the No. 1 place with annual sales of 2.7 trillion won ($2.52 billion), followed by Shilla Duty Free with turnover of 1.5 trillion won.
The two duty-free giants account for 80 percent of the market. The other players, in order of size, are: JDC Duty Free; Donghwa Duty Free; Duty Free Korea; SK Duty Free; and Paradise Duty Free.
Paradise Duty Free had an average annual sales of 145 billion won.
Paradise Duty Free Shop is located in Paradise Hotel in the special tourist zone of Haeundae, Busan, and is the biggest duty free shop in Busan with 6,921 square meters (1.7 acres) of floor space.
By Kim Jung-yoon [email@example.com]
More in Industry
Posco receives first shipment delivered by LNG carrier
Renault Samsung offers voluntary retirement as woes continue
SK Innovation acquires stake in Chinese BaaS operator
LG may hang up on smartphone business