SOUTH KOREA. Lotte Duty Free will begin divesting some KRW20 billion (US$16.5 million) of unsold duty free inventory through alternative local channels from Tuesday, 23 June.
As reported, Korea Customs Service (KCS) announced on 29 April that it accepted the local duty free industry’s request to offload unsold stock (after paying import taxes) through a range of channels.
Under guidance announced on 29 April, KCS will temporarily allow:
1) Local distribution of unsold duty free inventory (limited to items held by retailers for over six months)
2) The transfer of ownership of unsold imported foreign goods to another party
3) International shipping and sales of unsold imported foreign goods overseas. According to the existing Customs law (i.e. as applied before the temporary measures), any unsold inventory of duty free products is required to be discarded or returned to the manufacturer. That changes under the relief measures.
Lotte Duty Free CEO Kap Lee announced today that the sale of the undepleted stock would start through Lotte’s integrated online platform Lotte On from Tuesday, 23 June and continue through branches of the Lotte Department Store and outlet shops from 26 June.
Lee said, “The allowing of domestic sales for duty free products offers the duty free industry, which has been struggling for a while, air to breathe. We will continue to strive to develop the duty free business.”
From 23 June, the country’s leading travel retailer will begin selling 50 overseas luxury brands online. This online sales event, themed Maumbang yeok (literally ‘mental quarantine’, a modern Korean idiom being used to express the concept of addressing the mental pain caused by COVID-19), offers duty free products at up to -60% off the previous retail price. Online sales are divided into advance reservations and immediate purchases.
Lotte Duty Free will donate 0.5% of online sales to support medical staff working to assist the COVID-19 crisis.
From 26 June, the retailer plans to sell ten foreign luxury brands in the offline channels mentioned earlier. Lotte Duty Free said that it will maximise synergies between offline and online retail to ensure the programme is a success.
