SOUTH KOREA. Lotte Duty Free shop has begun a full-fledged effort to diversify its foreign visitor base in response to what it described as the Chinese “tourism crisis” linked to the THAAD anti-missile system dispute.
As reported, Lotte and other South Korean retailers have been hard hit by a China National Travel Administration (CNTA) ban on group travel to South Korea that took effect on 15 March.
The ban is part of a furious political and consumer backlash against the South Korean government’s decision to deploy the controversial US anti-missile system as a defence and deterrent against North Korean attacks. China considers THAAD a threat to its own security and to regional stability.
Lotte Duty Free has felt the brunt of that fury, due to parent Lotte Group’s agreement to site THAAD on company land. Lotte Group websites have been attacked and its stores and products subjected to boycotts in China.
As reported, the company has introduced plain, unbranded shopping bags at its airport and downtown stores in response to the controversy.
The Chinese represented almost half of South Korea’s total inbound visitor base last year and around 70% of duty free spending.
Lotte Duty Free has responded by stepping up its efforts to attract more Japanese visitors. Led by CEO Jang Seon-wook, the company attended the Korea Travel Expo in Tokyo and Osaka on 23 and 24 March, alongside three Lotte Group sister companies, including Lotte Hotel and Lotte World Adventure. The group said the exhibition was a good opportunity to underline the excellence of South Korea’s tourism sector and to unveil Lotte World Tower tour products scheduled for a Grand Opening on 3 April.
The first day of the fair, held at the Tokyo Ritz-Carlton Hotel, was attended by 60 local travel agencies and featured a publicity video from the four Lotte companies. Over 40 local travel agencies attended the follow-up event in Osaka. Again, Korean travel products were highlighted, including a promotion for Lotte Duty Free Kansai Airport.
Lotte Duty Free noted a particularly positive reaction to its Lotte World Tower tour products, including its duty free shopping offer. The promotions focused on integrated tours that combine shopping, leisure and sightseeing.
Lotte Duty Free has geared up its efforts to lure more Japanese visitors since last September, having also hosted promotions in Fukuoka and Hokkaido. It is using various platforms, including magazine and online media, to maximise awareness of South Korea.
“Lotte Duty Free is planning to further expand its activities by participating in overseas travel fairs to diversify the balance of foreign tourists,” said Jang. “We will achieve a balanced tourism market base.”
The number of Japanese tourists visiting South Korea dropped -19.4% in the MERS-hit 2015 to 1,837,782 but grew +25% in 2016 to 2,297,893. For the first two months of 2017, Japanese visitor numbers rose by +20.8% to 339,894.
Lotte is also targeting Thailand and Indonesia to help diversify the foreign visitor base. Last year saw a +26.5% surge in Thai visitors to 470,107, while Indonesian numbers rocketed by +52.6% to 295,461.
