Lee Hyo-sik is Finance Desk editor at The Korea Times. He manages finance-related stories on macroeconomics, banks, stocks, bonds, crypto etc. He is passionate about covering what's happening in Korea's financial industry and explaining it to both Korean and non-Korean readers. You can reach him at leehs@koreatimes.co.kr. Your insights and feedbacks are always appreciated.
Shilla Duty Free raising profile overseas
A Shilla Duty Free shop at Incheon International Airport
By Lee Hyo-sik
By Lee Hyo-sik
Shilla Duty Free, Korea’s major operator in this sector affiliated with Samsung Group, has set its sight on Southeast Asia to tap into the rapidly growing tax-free retail business there. It is scheduled to open stores in Singapore and Malaysia in the coming months targeting both locals heading abroad and foreign tourists visiting the two countries.
Early this month, Shilla Duty Free secured a contract to set up two shops in Kuala Lumpur International Airport next April. The stores will open at the airport’s No. 2 terminal in April next year, designed primarily to draw Malaysian tourists traveling abroad.
The firm plans to turn part of the 230 square-meter store into a ``Hallyu Zone’’ in order to attract young Southeast Asian shoppers interested in K-Pop and other cultural content.
In August, Shilla won a contact to open a duty free shop dealing with fashion items at Singapore’s Changi International Airport, one of the world’s busiest aviation hubs. A month later, the duty free shop operator also secured a deal to add another fashion store to the airport. Both outlets are scheduled to open their doors on Dec. 1.
``We competed hard against our global rivals to secure the sites. We will sell a wide range of Korean and non-Korean fashion and beauty products,’’ a Shilla Duty Free spokesman said. ``Given the popularity of Korean singers and actors in Singapore and Malaysia, we expect the stores will attract a large number of both local travelers and foreigners visiting these nations.’’
The spokesman said Shilla will first focus on Southeast Asia to target a growing number of wealthy Asian travelers. ``But in the future, we will move into China, Europe, North America and other parts of the world to become one of the global top five duty free operators.’’
The global duty free market grew 18 percent to $46 billion in 2011 from the previous year. In particular, the sector expanded 25 percent in Asia, 18 percent in North America and 14 percent in the Middle East in view of the increasing number of international travelers.
The race to get an upper hand in the increasingly lucrative market has become fiercer, making it difficult to secure sites to set up shops at international airports. But Shilla, which currently ranks ninth globally, has come out winner over the past few months ahead of DFS and other larger rivals.
``We are a latecomer in the industry. But we have rapidly caught up with our bigger competitors on the back of our extensive operational knowhow and successful marketing strategies. Using our success at home as a springboard, we will continue to expand our presence abroad,’’ the spokesman said.
Shilla earned 905.9 billion won in the first six months of this year, up 39.2 percent from 650.7 billion won in the same period last year. Its operating profit grew nearly four-fold to 60.1 billion won from 15.2 billion won over the one-year period.
Its earnings generated from Chinese and other non-Korean customers rose 75 percent, with its 2012 revenue expected to exceed 2 trillion won for the first time if the trend continues at this current pace.