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In the new year, Lotte Duty Free has decided to completely stop trading with a Chinese bagger for the first time in the industry.
The decision came at a time when Chinese baggers bought and distributed duty-free goods in large quantities as part of a strong build-up to accumulate losses and restore profitability.
Chinese baggers, which have accounted for a large portion of the duty-free industry's sales since 2017, handed over their goods to 40-50% of the normal price, handing losses to duty-free shops.
Lotte Duty Free lowered its commission to resolve this, but the loss was still huge, and it eventually decided to stop trading.
The decision is a strong step toward restoring profitability amid deteriorating earnings last year and a crisis in the duty-free industry, with Lotte Duty Free seeking a new path by strengthening its marketing strategy for individual domestic and foreign tourists.
Based on recent performance, last year is expected to be the worst year in the duty-free industry, worse than COVID-19.
The cumulative operating losses of the four major duty-free industries, Lotte, Shilla, Shinsegae, and Hyundai, in the first three quarters reached KRW 135.5 billion, and the annual operating loss is expected to reach KRW 200 billion.
The existence of duty-free shops is in jeopardy due to consumers' tendency to prefer road shops such as CJ Olive Young and Daiso and negative factors such as a sharp rise in the won/dollar exchange rate.
The industry believes that Lotte Duty Free's decision to preemptively stop trading with Chinese baggers reflects the urgency to increase profitability that has fallen to the bottom.
In the midst of this crisis, Lotte Duty Free is strengthening its marketing strategy for individual domestic and foreign tourists and promoting profitability-oriented management.
CEO Kim Dong-ha announced his plan to normalize the duty-free industry by setting the improvement of product competitiveness and increasing the proportion of individual travelers as key tasks.
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The decision came at a time when Chinese baggers bought and distributed duty-free goods in large quantities as part of a strong build-up to accumulate losses and restore profitability.
Chinese baggers, which have accounted for a large portion of the duty-free industry's sales since 2017, handed over their goods to 40-50% of the normal price, handing losses to duty-free shops.
Lotte Duty Free lowered its commission to resolve this, but the loss was still huge, and it eventually decided to stop trading.
The decision is a strong step toward restoring profitability amid deteriorating earnings last year and a crisis in the duty-free industry, with Lotte Duty Free seeking a new path by strengthening its marketing strategy for individual domestic and foreign tourists.
Based on recent performance, last year is expected to be the worst year in the duty-free industry, worse than COVID-19.
The cumulative operating losses of the four major duty-free industries, Lotte, Shilla, Shinsegae, and Hyundai, in the first three quarters reached KRW 135.5 billion, and the annual operating loss is expected to reach KRW 200 billion.
The existence of duty-free shops is in jeopardy due to consumers' tendency to prefer road shops such as CJ Olive Young and Daiso and negative factors such as a sharp rise in the won/dollar exchange rate.
The industry believes that Lotte Duty Free's decision to preemptively stop trading with Chinese baggers reflects the urgency to increase profitability that has fallen to the bottom.
In the midst of this crisis, Lotte Duty Free is strengthening its marketing strategy for individual domestic and foreign tourists and promoting profitability-oriented management.
CEO Kim Dong-ha announced his plan to normalize the duty-free industry by setting the improvement of product competitiveness and increasing the proportion of individual travelers as key tasks.
AI Anchor|Y-GO
Edit Caption | Line
#NowNews
[Copyright holder (c) YTN Unauthorized reproduction, redistribution and use of AI data prohibited]
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