South Korea amps up duty-free efforts to draw Chinese tourism

October 9, 2014
Duty free shops are so successful, they may soon be opening up outside of South Korea's borders (AP)

Duty free shops are so successful, they may soon be opening up outside of South Korea’s borders (AP)

By The Korea Times Los Angeles staff

South Korea announced that it will be issuing more licenses that will permit the opening of duty-free shops.

According to a Korea Tourism Organization report, the number of Chinese tourists visiting South Korea will exceed six million by the year’s end.

Many of them travel to take advantage of local and national tax exemptions especially for Korean cosmetic products.

Since 2010, South Korea has boasted the largest duty-free market in the world primarily through Lotte Duty Free and Hotel Shilla.

According to a Korea Customs Service report, South Korea brought in an estimated revenue of $5.86 billion solely through their duty-free sales in 2012.

The duty-free centers are also implementing aggressive marketing strategies in which K-Pop stars put on concerts and meet fans, which is particularly effective for tourism because the “Korean Wave” or popularity of Korean pop culture is rapidly spreading outside of South Korea’s borders.

South Korean government officials did not reveal how many licenses would be release, but so far, the country already has 42 duty-free shops spread across cities and holiday hot spots including Jeju Island.

Both Lotte Duty Free and Shilla ventures have been so successful that they plan to expand their business models overseas.