Korea looks elsewhere as Chinese shoppers vanish

South Korea has stepped up efforts to overhaul its dependence on Chinese shoppers by shifting the focus to other Asian countries.

The country’s tourism sector – especially the duty-free retail industry – is bearing the brunt of the fallout triggered by the stationing of an advanced US missile defense system in Korea.

In what appears to be acts of retaliation by Beijing against Seoul’s decision reached in July to host a Terminal High Altitude Area Defense (THAAD) battery, since Wednesday, all package trips from China to South Korea have been banned at the behest of authorities.

China has vehemently objected to the missile move, saying THAAD’s high-power radar can be used to spy on its own military.  

This week, Chinese airlines have cut back on South Korea-bound flights and Chinese cruises are no longer making stopovers at local ports in popular tourist destinations.

The slew of restrictions by Beijing has caused concerns among the local tourism and related sectors, such as the duty-free business, as they have heavily depended on Chinese visitors as sources of profit. Not only did they account for half of all foreign travellers last year, but they were big spenders who spent at least US$2000 per person buying things in Korea.

In an effort to minimise the impact, Korea’s central and provincial governments are pushing to diversify foreign visitors to Southeast Asians and those from the Middle East, where Korean pop stars and TV drama series have gained huge popularity.

Busan, South Korea’s largest port city, plans to bolster designing various tour programs that target Middle Eastern visitors, who are mostly big fans of Korean dramas, its city government said earlier.

The city will also work with local businesses to develop medical and cruise tours for visitors from the Middle East, India, Mongolia and Russia.

North Chungcheong Province, which has Cheongju International Airport, is pushing to increase flights to Taiwan, Vietnam, Russia and Japan.

Related to such moves to diversify, the culture ministry said Thursday it plans to hold tourism exhibitions in Vietnam and Singapore next month to promote South Korea.  

Aside from state and provincial efforts, local firms, led by duty-free operators, are rushing to diversify their customer bases to tide over current difficulties. Hanwha Galleria, the duty-free unit of Hanwha Group, recently clinched deals with two travel agencies in the Middle East to secure foreign customers.

It also plans to work with local hospitals to offer medical treatment services for Middle Eastern visitors as part of their tour programs.  

“The purchasing power of Middle Eastern customers on average is 30 per cent higher than people from China. We see (the THAAD issue) as a chance to boost our duty-free business through focusing more on individual tourists and VIP marketing,” Hanwha Galleria said.

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