South Korea still dominates global duty-free market
South Korea has maintained a dominant share of the global duty-free market, despite its recent political turmoil.
According to a GlobalData report, with a 22 per cent share of sales, South Korea is the world’s largest duty-free market, which reached a sales high of US$11.7 billion last year. The past two years have seen sales growth of 23.1 per cent annually in the sector.
These sales figures were achieved against the context of the Terminal High Area Defense (THAAD) missile row between South Korea and China that halved the numbers of Chinese tourists visiting the country.
Maureen Hinton, retail research director at the data and analytics company, said: “The deployment of the THAAD missile system in South Korea and the consequent ban on Chinese travelers visiting the country was potentially very significant. As the Chinese are the big spenders and a key driver of the market, a decline in sales should have been the outcome.”
Despite this, Chinese shuttle traders, who on-sell high quantities of Korean duty-free products back in China, combined with international attention on the Seoul Winter Olympics, have been major factors in the country’s dominance of the market sector.
Hinton added: “GlobalData forecasts that by 2022, South Korea will account for nearly a quarter of all duty free spending at 24.1 per cent of the global market. However, optimism about a new settled relationship with North Korea could drive its sales even higher if the border opens.”