South Korea's major duty-free shops have been operating in the black in recent months despite the number of Chinese tourists declining over the country's plans to deploy an advanced US missile defense system, indtry sources said Monday.
Chinese travel agencies in recent weeks spended sales of tour packages to South Korea as part of the Beijing government's retaliation against Seoul's decision in July to have the Terminal High Altitude Area Defense system deployed on South Korean soil later this year. South Korea says the missile system will not target China but only counter threats from North Korea.
Tourists shopping at the Lotte duty-free store (Yonhap)
HDC Shilla Duty Free said it posted a surpl of 125 million won ($107,982) on 53.2 billion won in sales in January.
It is the first time the joint venture between Hotel Shilla Co. and Hyundai Development Co. recorded a monthly surpl since its opening in December 2015.
HDC Shilla also had 1 billion won in operating profit on 67 billion won in sales in February.
The company suffered 20.9 billion won in operating deficit on 397.5 billion won in sales last year.
Shinsegae DF said its Myeongdong branch in downtown Seoul recorded an operating profit of 1.2 billion won on sales of 75 billion won in January in the first operating profit since last May when the Myeongdong branch opened.
Hanwha Galleria, an affiliate of Hanwha Group, and Doota Duty Free Shop, run by Doosan Group, said they have been improving in recent months with their daily sales surpassing 1 billion won each.
Hanwha Galleria logged an operating loss of 43.8 billion won and Doota a loss of 30 billion won last year.
The duty-free indtry, however, may face tough biness conditions in the coming months when the country is expected to receive fewer Chinese tourists in the aftermath of the Chinese government's retaliation.
Chinese clients account for about 80 percent of the sales for South Korea's duty-free shops, according to indtry data.
"We are trying to come up with measures for stainable management of the biness while refraining from excessive and cutthroat competition to achieve sales and profits at the same time," a HDC Shilla official said. (Yonhap)
