Duty-Free Shops Cementing Foreigner-Centric Structure... Foreigners Account for 77% of July Sales

The proportion of foreign sales in the duty-free sector continues to grow.

Last month, the number of foreign buyers surpassed 1.3 million, with foreign sales accounting for 77 percent of the total.

Compared to the same month last year, both the number of foreign buyers and their sales increased significantly, while domestic sales recorded a double-digit decline.

According to data released by the Korea Duty Free Shops Association on the 26th, the number of foreign buyers at domestic duty-free shops last month reached 1,303,527, a 31.6 percent increase from 990,831 in July of last year.

Foreign sales rose 28.8 percent year-on-year to 824.85 billion won, compared to 640.48 billion won during the same month last year.

The proportion of foreign sales to total revenue rose 7.9 percentage points from 69.6 percent in July of last year to 77.3 percent, nearing the 80 percent mark.

Conversely, domestic use of duty-free shops is declining sharply.

Last month, the number of domestic buyers dropped 14.2 percent year-on-year to 1,363,372 from 1,589,508, while sales also fell 13.5 percent over the year to 241.78 billion won.

Although the number of foreign buyers was slightly lower than that of domestic buyers, the average purchase amount per person showed a more than threefold difference at 180,000 won for locals and 630,000 won for foreigners, bringing total foreign sales to 3.6 times that of domestic sales.

Overall, the number of duty-free shoppers in July of this year increased by 3.4 percent and sales by 16 percent compared to last year, growth that was essentially driven by foreign customers.

However, compared to the previous month, foreign sales actually decreased.

Foreign sales dropped by about 10 percent from 917.6 billion won in June to July, while domestic sales increased by 14.6 percent from 211 billion won in June to July.

While foreign sales still account for the vast majority of the total, domestic sales showed a recovery trend compared to the previous month.

Within the industry, the recent decline in the won-dollar exchange rate has eased the burden of overseas travel and duty-free shopping for locals, raising the possibility of a gradual recovery in domestic consumption going forward.

A duty-free industry official stated, "The proportion of foreign sales has increased due to the growth in foreign tourists," adding, "We expect domestic demand to gradually recover depending on changes in the consumption environment, such as exchange rates."

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.