Profiling the world’s top travel retailers

The Shilla Duty Free


2019 turnover

€7,049 million

2018 rank




Shilla has been buoyed by its overseas growth in recent years, including beauty contracts at Changi and Hong Kong (pictured) airports

The Shilla Duty Free maintains its third-placed ranking in our list based on 2019 sales, with a performance that leaves it just -8% behind its great rival Lotte Duty Free (from -10% in 2018). Gross sales reached KRW9,129.5 billion (€7,049 million), up by +31% year-on-year. [Note: The figures include the HDC-Shilla joint venture for the purpose of these rankings -Ed].

2019 was a milestone year for the world’s third largest duty free retailer. In October Shilla closed a deal to acquire a 44% stake in 3Sixty Duty Free, the world’s leading inflight duty free retailer and an increasingly influential airport and omnichannel retailer.

This move, allied to strong recent concessions growth – the company has valuable P&C contracts at Incheon International, Hong Kong International and Singapore Changi airports – has established Shilla as a powerful international player, with overseas sales climbing +6% to KRW1.3 trillion. A decline in sales at Hong Kong International in H2 (amid political unrest) meant that overseas sales growth last year was however well down on the +72% recorded in 2018.

Shilla's store in Jeju is one of several that closed temporarily due to the crisis

Shilla remains heavily reliant on its core Korean business, which reached KRW7.8 trillion (including HDC-Shilla sales of KRW1.3 trillion), up by +36% year-on-year.

Shilla’s downtown duty free shops, where the company does most of its daigou trade, grew +34% year-on-year, outpacing the +8% year-on-year growth of the airport duty free business. The downtown channel will be boosted by the building of a new shop by 2025, with double the retail space.

COVID-19 will reshape the Korean market, as it will the global business. Financial analysts estimate that Shilla’s Q2 sales have dropped by -55% year-on-year with an operating loss between KRW40 to KRW50 billion.

Relief measures provided by Incheon International Airport Corporation and the rolling contract extension for its Terminal 1 concession (with rent based on a percentage of revenue) will temper operating losses though sales recovery will take time.

Although its 2020 business will be hard hit by the crisis, Shilla’s long-term prospects look solid as it strives for more market share within Korea and as its strong portfolio of concessions abroad build on a hoped-for eventual market recovery.

It too, though, stands to be hit by any crackdown on the daigou channel by the Chinese authorities. Continued geographic diversification will therefore grow in importance and 3Sixty will play a key role in driving that.

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The Moodie Davitt eZine

Issue 281 | 16 July 2020

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