Shinsegae, Cathay Pacific partner up for duty-free shopping mileage

[Courtesy of Cathay Pacific]

From 2024 onwards, Cathay Pacific Airways users will be able to use their mileage points to shop at Shinsegae duty-free shops in South Korea. Shinsegae Duty Free, one of Korea’s top three duty-free brands, plans to collaborate with the airline via a membership mileage partnership, in an effort to attract individual tourists to duty-free shops amid a shift from Chinese group tourists to diverse individual tourists, including those from Europe and Southeast Asia.

According to sources on Tuesday, duty free shop operator Shinsegae DF will engage in joint marketing using both companies’ customer memberships after signing a memorandum of understanding (MOU) with Cathay Pacific on December 19. The key aspect of this agreement is enabling purchases at Shinsegae Duty Free using Cathay Pacific’s airline mileage, which could attract overseas tourists arriving in Korea to its duty-free shops from Shinsegae Duty Free’s perspective. The initiative is the first example of shopping at duty-free shops using airline mileage in Korea.

Cathay Pacific, a Hong Kong-based global airline with a fleet of 173 aircraft, boasts a substantial membership base worldwide. In the airline assessment by the U.K.-based agency Skytrax in June 2023, Cathay Pacific ranked eighth, two places ahead of Korean Air Lines Co. Having operated in Korea since 1960, it is a familiar name to Korean air travelers. A collaboration with Cathay Pacific could yield substantial synergies for duty-free shops, which are aiming to attract more consumers, given the airline’s sizable proportion of Chinese passengers.

Shinsegae Duty Free is also pursuing joint marketing partnerships with globally renowned hotel chains and partners alongside Cathay Pacific.

Shinsegae DF highlighted the importance of increasing the number of visits from free individual travelers and stating the need for attracting various membership-based customers, a crucial aspect in the duty-free business.

Shinsegae Duty Free’s collaboration with Cathay Pacific and others stems from a desire to boost revenue, particularly after the resumption of Chinese group tourism in August 2023 failed to yield the expected sales surge.

According to Korea Duty Free Association’s data, an average of 637,778 foreigners used Korean duty-free shops monthly from August to October 2023 following the resumption of Chinese group tourism. This reflects an 18.7 percent increase compared to the May to July period, which saw an average of 537,209 users per month.