Korea Sale Festa benefits duty free shops

By Yoon Ja-young

Korea Sale Festa, the government-initiated nationwide sales event, has succeeded in boosting the sales of retailers. Among them, duty free shops turned out to be the biggest beneficiaries.

According to a Ministry of Trade, Industry and Energy survey of 54 retailers participating in the 11-day sales event that ran from Sept. 29 to Oct. 9, they saw a 10.1 percent sales increase on average compared with Oct. 1 to 11 last year when the country had the Korea Black Friday event. The government expanded the sales event this year, more than doubling and diversifying participating firms. It aimed at encouraging consumption to sustain the economy where exports have been falling on negative external factors.

Compared with 2014 when there was no such government-initiated sales event, the retailers saw sales jump 35.8 percent.

The event, however, didn’t increase sales evenly among diverse retail channels. Duty free shops benefited most from the event, as their sales soared 29.5 percent compared with a year ago. They owe the success to Chinese tourists who visited Korean en masse during China’s week-long national holiday, which overlapped with the sales event here. Chinese tourists are the biggest customers at the country’s duty free shops. According to Fair Trade Commission (FTC) data submitted to Rep. Je Youn-kyung of the main opposition Minjoo Party of Korea (MPK), the country’s top four duty free shops reported that over 60 percent of their total sales were to Chinese tourists.

The country’s five major department stores ― Lotte, Shinsegae, Hyundai, Galleria and AK ― also had sales surge 8.7 percent from last year and by 29.8 percent from 2014. The increase, however, fell short of expectations due to the typhoon that hit the country from Oct. 4 to 6, according to the ministry.

Online shopping malls saw sales increase 12.3 percent, while retail outlets saw a 1.6 percent increase and convenience stores 15.8 percent.

A separate survey on traditional markets showed 64.4 percent of the merchants saying their sales increased during the period, up 18.5 percent.

Throughout the event, shoppers were especially drawn to home appliances, which saw sales surge 48.7 percent. Garments and fashion items, meanwhile, increased only 4.9 percent due to the warm weather. This year’s event drew much attention as it had not only retailers but also manufacturers participating.

“Despite the typhoon, most retailers participating in the Korea Sale Festa saw sales increase. It was effective in boosting consumption,” said Toh Kyung-hwan, deputy minister for industrial creativity and innovation at the ministry.

He noted that cultural and tourism events were especially helpful as they attracted foreign tourists who contributed to increasing sales.