Chinese visitors lift retailers ahead of Lunar New year

A range of discount products was available at Lotte Department Store in Myeong-dong, central Seoul, on Sunday as part of a marketing campaign aimed at visiting Chinese shoppers ahead of the Lunar New Year. Customers with Chinese passports get a 12 percent discount. / Yonhap

By Park Jin-hai

Retailers have enjoyed an unprecedented sales boom in the weeks before the Lunar New Year, which falls on Feb. 19, thanks to the surging number of Chinese tourists.

More Chinese visitors are expected to visit Korea during their week-long holiday season, providing a further boost to department stores and other shops, which have been struggling with a prolonged consumption slump.

To attract more Chinese customers, retailers have launched aggressive marketing campaigns, offering gold bars and other high-priced giveaways, as well as hiring “hallyu” stars to sell products.

During the weekend ahead of the Lunar New Year holiday, or Chinese Spring Festival, on Feb. 18 – Feb. 24, Lotte Duty Free in Myeongdong central Seoul has been bustling with Chinese customers.

The cosmetics corner in particular was full with Chinese people queuing to buy items.

At the information desk, receptionists clad in Chinese traditional costumes greet and offer brochures in Chinese.

As the industry forecasts that the number of Chinese tourists during the time will increase 30 percent to nearly 130,000, department stores and shopping malls have upped their Chinese marketing to make up for profit losses from sluggish local demand.

Lotte Duty Free whose Chinese customers counted for 70 percent of their sales last year, doubled the size of prizes this time, with the expectation that this year’s Chinese sales during the festival will grow by 150 percent.

The Chinese purchasing power is double the local customers, averaging 700,000 won to 800,000 won, according to the company.

Shilla Duty Free also saw their sales from Chinese customers increase by 50 percent this year.

Lotte Department Store, the nation’s largest department store chain by revenue, is offering a 1.5 carat diamond crown, worth 20 million won, to the biggest spender.

It also expects to see 50 percent more Chinese customers this year.

To serve those tourists the branches where Chinese customers visit most, such as, Myeongdong, Jamsil and Busan, will open during the Lunar New Year every day except Thursday.

“From this week, the sales for fashion brands such as Style Nanda that Chinese customers prefer have increased more than 30 percent. When the holiday kicks in, we presume customers will increase,” said a Lotte Department official.

Hyundai Department Store, the country’s second-largest department store chain, sent Chinese versioned catalogues to 1,000 frequent shoppers in China, while Shinsegae Department Store holds a Panda Parade around the Myeongdong area and provides lottery tickets.

The Lotte Mart Seoul Station outlet also reported that its sales prior to the Chinese festival increased 40 percent.

“Snacks and hair products are popular items among Chinese customers. During the last holiday, sales went up 51 percent, but since more Chinese are expected this year, we think the number will increase further,” said Lotte Mart official in its Seoul Station outlet.

Hotels in Chinese tourists’ popular destinations are also reaping the benefits. At Sejong Hotel in Myeongdong, 10 percent more Chinese customers booked, taking 25 to 30 percent of all guests.

Meanwhile, over 6 million Chinese visited Korea last year, up 42 percent from the previous year, according to the Korea Tourism Organization. This increased production by 18.6 trillion won, equivalent to a single Chinese customer creating over 3 million won in increased production. This led to the hiring of approximately 340,000 people.