Foreign shoppers at Korean duty-free stores numbered 1,279,206 in June, surpassing the 1,196,865 domestic shoppers. Sales to foreigners also rose 11.6% from a year earlier. However, the growth rate in shoppers reached 31.9%, or 20.3 percentage points higher than the sales growth rate. As a result, per-capita spending by foreign shoppers fell 15.4% from a year earlier to about 717,000 won.
According to industry data from the Korea Duty Free Shops Association released on the 27th, foreign shoppers at domestic duty-free stores numbered 1,279,206 in June, up 31.9% from the same month last year. That was 82,341 more than the 1,196,865 domestic shoppers.
The number of foreign shoppers has steadily increased since the start of the year. Foreign shoppers, who numbered around 940,000 in January, rose to 1.08 million in March, 1.19 million in April, and 1.23 million in May, approaching 1.28 million in June.
Sales to foreigners also grew. Foreign duty-free sales reached 917.6 billion won in June, up 11.6% from the same month last year and 7.1% from the previous month. Foreign sales accounted for 81.3% of total duty-free sales of 1.1286 trillion won, up 5.5 percentage points from the same month last year.
However, sales did not increase as much as the rise in foreign shoppers. While foreign shoppers grew 31.9% from a year earlier, the sales growth rate stood at just 11.6%. As a result, the amount each foreign shopper spent at duty-free stores was about 717,000 won, down 15.4% from the same month last year.
Domestic spending, by contrast, declined. Domestic duty-free sales in June were 211 billion won, down 17.1% from the previous month and 19.8% from the same month last year. As foreign spending rose, total duty-free sales increased 4.0% from a year earlier, but weak domestic demand persisted.
While the increase in foreign tourists is propping up duty-free sales, whether this will lead to a recovery in profits remains to be seen. The number of foreigners visiting duty-free stores is rising rapidly, but the amount each spends is declining. Converting foreign tourists into actual buyers and raising the average ticket has emerged as a challenge for the duty-free industry.
