Profiling the world’s top travel retailers

Lotte Duty Free


2019 turnover

€7,665 million

2018 rank




Looking ahead at Lotte Duty Free: A view of the new Singapore Changi arrivals store branding

Lotte Duty Free’s top line flourished in 2019, with sales rising by more than +28% year-on-year in Korean Won terms to KRW9.9 trillion (€7,665 million). The business was boosted by strong volumes from large-scale daigou resellers and the continuing return of Chinese FIT visitors to South Korea after a sharp downturn in 2017 and some recovery in 2018.

Lotte Duty Free maintains second place in our rankings but closed the gap on first placed Dufry; from -21% behind in 2018, its comparable figures were down by just -5.8% in 2019.

Despite the stellar growth rate recorded by Lotte Duty Free, the company lost Korean market share to its traditional competitors The Shilla Duty Free and Shinsegae Duty Free last year. Lotte Duty Free retains leadership in its home market, with a 38% share in 2019, but that had previously been 42% in 2017 and 40% in 2018. The Shilla Duty Free accounted for 27% of the market in 2019 with Shinsegae Duty Free at 17%.

While continuing to focus on growing its Korea duty free business, Lotte’s focus on its overseas duty free portfolio has increased further.

In January 2019 Lotte Duty Free took over five stores in Oceania as part of its acquisition of JR Duty Free’s portfolio. This included four stores in Australia (Brisbane Airport, Swanston Street, Darwin Airport and Canberra Airport) and one in New Zealand (Wellington Airport). Lotte Duty Free also began operations at Hanoi Airport in Vietnam in July 2019. Sales from overseas locations accounted for 6% of Lotte Duty Free’s gross sales in 2019.

Lotte Duty Free will hope that busy scenes like this will return soon at its flagship Myeong-dong store in Seoul

Its drive to become an international player was boosted by the capture of the Singapore Changi Airport liquor and tobacco concession, valued by The Moodie Davitt Report at around S$590 million (US$430 million) in sales in 2018.

That six-year contract began last month (9 June), spanning 18 shops across more than 8,000sq m of retail space once all reopen. Lotte Duty Free’s experience and performance at Changi will go a long way to determining the success of its overseas strategy, though certainly it has been unlucky in kicking off that business in the midst of a global pandemic that has effectively stopped Singapore’s inbound and outbound tourism sectors. Certainly it gives the company confidence that it can make further gains as other strategic, blue-chip concessions come to market.

Lotte Duty Free had targeted KRW1 trillion in overseas business by 2020 and if it were not for COVID-19, that target may have been within reach.

Another strategic focus is ecommerce. Lotte commanded a 42% market share in the highly competitive Korean online duty free market in 2019, well ahead of The Shilla Duty Free’s 29%. While the overall duty free online market grew by +31%, Lotte Duty Free’s business in this channel outpaced it, surging by +59%.

COVID-19 has had a sharp impact in 2020, with the Korean duty free market down -39% year-on-year from January to May. Excluding January when the travel retail market was unaffected by the coronavirus, the duty free market was down by -50.6% year-on-year. Lotte Duty Free’s performance broadly tracked that of the market in the first five months.

Although the operational environment remains difficult, Lotte Duty Free appears reasonably well positioned to weather the short-term storm and can perhaps even recover more quickly than some of its global competitors. This is partly due to deregulation of the market by Korea Customs Service – which has allowed the industry to sell stock duty paid through local channels – and the influence of large scale daigou operators in the Korean market. While sales to Koreans were down by -89% year-on-year in May, sales to foreigners fell just 46% year-on-year. Buoyed by the daigou business, sales per person to foreigners increased by a remarkable +927% year-on-year in May.

The big question mark, however, remains the fate of the China-orientated daigou reseller market. China is watching closely and the authorities are increasingly concerned about the amount of product finding its way onto Chinese shores. Those same authorities are already warning that Hainan must not become a rampant daigou market. Would they crack down at home and allow the sector to flourish abroad? Unlikely.

Partner's message


The Moodie Davitt eZine

Issue 281 | 16 July 2020

The Moodie Davitt eZine is published by The Moodie Davitt Report (Moodie International Ltd) every month.

© All material is copyright and cannot be reproduced without the permission of the Publisher.

To find out more visit and to subscribe, please e-mail