Japanese now biggest customers at Korean duty-free shops

Foreign visitors take photos at the Lotte Duty Free Family Concert in Seoul on June 16. [Photo provided by Lotte Duty Free]

The number of Chinese tourists, traditionally the biggest spenders in South Korea’s duty-free industry, is waning and the void is now being filled by Japanese.

At the Lotte Duty Free Family Concert, the largest event in the local duty-free industry, Japanese visitors outnumbered Chinese visitors for the first time. Tickets for the concert are given out for free according to the amount of money spent at duty-free shops, making the event a barometer of user demographics in duty-free shopping.

According to Lotte Duty Free on Wednesday, a total of 5,000 foreign visitors attended its June 16-18 concert. The total number of visitors was around 30,000, with foreigners representing about 17 percent.

By nationality, the number one spot behind Korean went to Japanese with 2,000 visitors. Chinese, the once largest duty-free shoppers in Korea, came in at 1,500, which is on par with the rest of the world.

This is a big change. The last time a concert was attended by foreigners before the pandemic in 2016, Chinese people were the overwhelming majority of the entire 25,000 foreign visitors.

The local retail industry has been trying to diversify sales as the relationship between Korea and China shows no signs of resolving.

Lotte Duty Free saw a 40 percent drop in sales from Chinese tourists in the first five months of this year compared to 2019. In contrast, sales from Southeast Asian tourists increased by 30 percent during the same period.

As the K-pop craze spreads to the U.S. and Europe, the duty-free industry expects sales to increase in developed countries with high purchasing power.

“We need to diversify our sales as there are observations that there will be a delay in allowing visas for Chinese group tours,” said a retail industry insider.