The Shilla Duty Free
Jeju’s rejuvenated market (II)
In this contributed article, the world’s fifth-biggest travel retailer examines the resurgence of Chinese group and FIT tourism on the island and the hugely positive implications for duty free retailing.
Returning FIT Customers
FIT customer numbers have been significantly increasing each month.
As of August 2023, the visitor count at The Shilla Duty Free Jeju store has recovered to 80% of the levels seen in 2019.
Especially during the peak season of August, there was a notable rise in FITs accompanied by their families. Consequently, the Jeju store’s FIT sales surpassed even those of The Shilla Duty Free’s flagship Seoul branch.
In particular, the proportion of FIT customers whose purchases are characterised by high value and high unit prices is expanding, resulting in increasing demand for luxury brands.
Luxury fashion and luxury watches and jewellery brands alone account for about 60% of The Shilla Duty Free Jeju’s FIT sales, underscoring the popularity of luxury brands.
The FIT sector is also bouncing back. Pictured above and below Chinese families spend some time at The Shilla Duty Free
Jeju tops the list of cities preferred by Chinese visitors
According to a Jeju Tourism Organization (JTO) survey post-COVID, Jeju Island was selected as the top Korean city Chinese tourists wish to visit.
That most-preferred status is due to the island being perceived as geographically advantageous and offering diverse touristic activities.
Notably, recent data from Ctrip, one of China’s top three online travel platforms, showed that searches for ‘Jeju Island’ reached 65,000, a notably +330% higher than the 15,000 searches for ‘Busan’.
Chinese visitors peruse an art gallery space on the first floor of The Shilla Duty Free in downtown Jeju
Jeju duty free: A promising retail channel for international luxury shoppers
Based on credit card analysis data from the Jeju Tourism Organization (JTO), foreign visitors to Jeju in 2019 spent approximately KRW1 trillion (US$749 million, with 95% spent at duty free shops. This data clearly illustrates the substantial spending of foreign visitors at these establishments.
Recently, the number of visitors to casinos in Jeju has also risen, leading to a surge in high-ticket customers and sales.
Geographically, Jeju is positioned at the central maritime route connecting the continent, including Russia and China, with countries and regions such as Japan and Southeast Asia. It plays a crucial role as a mid-stop for Asian cruise tourism.
Local destination merchandise proves a hit with Chinese shoppers
Uniquely in Korea, Jeju allows tourists visa-free entry, permitting foreign visitors to stay for up to 30 days without a visa. These geographical and policy advantages are driving a swift recovery in Jeju tourism.
Furthermore, various stakeholders, including the Korean government, actively promote Jeju’s tourism and duty free industries. There are also ongoing plans for a second airport construction project in Jeju, suggesting a very high potential for a further increase in passenger numbers.
Meanwhile, spanning four floors, The Shilla Duty Free store in Jeju offers a broad shopping space showcasing everything from top-tier global luxury brands to world-class cosmetics and perfumes, providing tourists with an unparalleled duty free shopping experience.
The first floor houses an exhibition space featuring artworks by Jeju-based artists, creating a cultural space where visitors can experience everything from shopping to art.
The second floor exclusively showcases unique Jeju souvenir brands. With the increasing number of FIT customers, The Shilla Duty Free is enhancing events targeting them, deploying themed photo zones on the first floor and the rooftop garden.
Given all these developments, a dazzling recovery of Jeju’s duty free market is anticipated.
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The Moodie Davitt eZine
Issue 327 | 29 September 2023
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