Lotte Duty Free opens first outlet in Vietnam
Lotte Duty Free, the travel retail arm of South Korean conglomerate the Lotte Group, is making a foray into the Vietnam market for the first time as a duty-free retailer as it seeks to diversify its revenue sources after local outlets were hard-hit by thinning Chinese visitors.
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According to Pulse by Maeil Business News Korea, the Republic of Korea’s leading daily business newspaper, and the Yonhap News Agency, the company opened a duty-free shop in Da Nang, the popular tourist destination in central Vietnam.
Called Phu Khanh Duty Free, the shop is a joint venture between Lotte and a Vietnamese company, with the former holding 60%.
The shop covers 1,000 sq m and is currently under trial operations, with its official opening set to take place later this year, perhaps as early as August.
Lotte plans to open additional duty-free stores in Ho Chi Minh City, Hanoi, and other major cities in the country.
Lotte Duty Free’s decision to open outlets in Vietnam comes after grappling with a sharp fall in sales at its shops at home, as Chinese tourist numbers in the Republic of Korea have fallen after the Chinese Government issued a travel ban to the country in retaliation for Seoul’s installation of a US anti-missile system.
Of combined sales of 12.3 trillion Korean Won (US$10.96 billion) raked in by duty-free outlets in downtown Seoul and airports last year, the lion’s share, of 70%, came from the pockets of Chinese tourists.
The launch of the duty-free shop in Da Nang underscores Lotte’s push to expand its overseas foothold.
It is the third-largest duty-free operator in the world, after the Swiss-based Dufry A.G. and DFS from the US.
It is the first South Korean duty-free operator to have arrived in Vietnam.
It is also planning to open another city outlet in the Thai capital of Bangkok this month. It currently runs airport stores in Indonesia, Japan, and Guam.
