Korean duty-free store operators target young consumers with membership programs

[Courtesy of Shilla Duty Free]

Duty-free store operators in South Korea are introducing paid memberships designed exclusively for young people in their 20s and 30s as they have emerged as major spenders over the recent years.

According to industry sources on Sunday, the country’s leading duty-free operators are offering paid membership programs for young people, which provide benefits that exceed membership fees.

Shilla Duty Free launched “Shilla & 20,” a paid membership for customers in their 20s last month. The offer is part of a move to secure loyal customers in the younger age group. Only 200 people aged between 20 and 29 can join the membership.

“Although we are at an early phase of launch, the membership is selling steadily and we expect it to be sold out in the near future,” said an unnamed official from the company.

Shilla Duty Free introduced the industry’s first paid membership, “Shilla &” in July last year. The membership, also limited to 200 people, was sold out in just two days, proving the potential of paid membership service.

The membership fee was 300,000 won ($228.24), but benefits exceed that amount as members are given special points worth 390,000 won and a welcome gift, among others.

The company also launched a membership exclusive to Korean cosmetics giant Amorepacific Corp in February this year. It has a membership fee of 800,000 won but offers special points and benefits worth 1 million won. All 100 available spots were filled. “Currently, customers in their 20s and 30s account for nearly 30 percent of Shilla membership VIP customers, which is a significant proportion,” said an official from the company.

Lotte Duty Free launched “Young Travel Club Membership” in May for customers aged between 20 and 34, which was sold out with 200 members on a first-come, first-served basis.

The membership fee was 100,000 won. Upon subscription, members were immediately provided with LDF PAY worth 100,000 won, which could be used online and offline.

[Photo by Lee Seung-hwan]

Lotte Duty Free allowed its members early access to top-tier benefits available only to customers that have made purchases of at least $10,000.

A representative example is the Armani Beauty Class held at Lotte Duty Free’s main store in Myeong-dong in central Seoul. The class, conducted for the top 40 customers, allowed participants to experience the Italian luxury fashion house‘s main products and new products, as well as receiving one-on-one beauty consultations that included hand massages.

“The proportion of customers in their 20s and 30s among our top customers has expanded to 27.3 percent in 2023 from 20.5 percent in 2022,” said an unnamed official from Lotte Duty Free.

Hyundai Department Store Duty Free Co. operates “H.COS Club,” a beauty membership program that focuses on beauty product purchases such as cosmetics and perfumes.

Customers in their 20s and 30s account for more than half of the entire membership sales, according to the company. Along with the membership, the company also focuses on digital content. It applies shopping experiences utilizing digital technologies such as metaverse and non-fungible tokens (NFTs) to its online and offline stores.

Since May, Hyundai Department Store Duty Free has set up a “SMATh World NFT Pop-up Store” on the 9th floor of its Trade Center Store, displaying and selling digital works and goods using digital characters “Newnik Traveler” and “Banana Noma.”

Shinsegae Duty Free, which has attracted many K-street fashion brands, is targeting local and global customers in their 20s and 30s. The company has been steadily attracting K-street fashion brands, such as LifeWork, Big Wave Collective, All That Cake, 5252 BY O!Oi, and APIECEOFCAKE.

“Customers in their 20s and 30s account for nearly 44 percent of our VIP customers,” said an official from the company. “We are actively working with street fashion brands to build a young duty-free shop image.”