AUSTRALIA. Lotte Duty Free is promising “a duty-free shopping experience like no other” at its new 3,000m² store in Sydney city center which will open on Thursday 5 May.
Lotte Duty Free, South Korea’s number one travel retailer and number two worldwide (Source: The Moodie Davitt Report Top 25 Travel Retailers), will open the store on three levels at the corner of Pitt Street and Market Street, the heart of Sydney’s shopping district within the central business district.
Lotte Duty Free is targeting sales of KRW 1 trillion ($790.3 million) in the first ten years of operation. The company said Australia’s pre-COVID duty-free market was also worth KRW 1 trillion, noting that competition among global retailers, including itself, Dufry, DFS Group and Heinemann, is “fierce”.
Lotte Duty Free has described the Sydney city center store as a “stepping stone” to becoming Australia’s largest duty-free retailer. In a press release, he called the opening a “restart of our global business and a large-scale entry into the Oceania duty-free market.”
The inauguration marks the opening of the first Lotte Duty Free store in 683 days since launching operations at Singapore Changi Airport in June 2020. The following months have coincided with the COVID-19 pandemic which has hit the business hard at home and abroad.
The travel retailer said the store will house many brands never before seen in Australian retail. Popular brands debuting include Pola and Cosme Decorté, which will be offered alongside a wide range of international names including Estée Lauder, Lancôme, Shiseido, SK-II and Gucci Beauty in a range of over 100 brands from beauty.
Australian brands include Beauty Chef and Vita Glow, while the growing niche fragrance sector is represented by a variety of labels such as Le Labo, Frederic Malle and Kilian Paris. The store will carry more than 150 brands in the cosmetics, perfumes, wines and spirits, watches (including Omega, Montblanc, Longines and Mido) and jewelry categories.
Buyers will be greeted by a concierge and will discover a differentiated experience on each floor. The upstairs wine and spirits area will offer a cellar door experience where wine connoisseurs can connect with Lotte Duty Free’s resident sommelier and sample local wines or sample premium whiskeys in a whiskey bar of 100 bottles.
The interiors of the stores were designed by Australian design firm Bates Smart. The company’s architectural style has created what Lotte Duty Free has called a “fresh and contemporary” environment that incorporates the latest technology to ensure an informed and enjoyable shopping experience for customers.
Lotte Duty Free CEO Lee Kap said, “Lotte is home to some of the most luxurious brands in the world. We pride ourselves on offering buyers everything they are looking for in a space that elevates this part of their journey. Our retail partners are a testament to Lotte’s reputation around the world and we are thrilled to bring this retail experience to one of our favorite cities, Sydney.
Stephen Timms, CEO of Lotte Duty Free Oceania, said: “The duty free experience is as important as every other aspect of travel. From hotel to location, travelers want something special and memorable.
“Design innovation and customer experience were the guiding principles in creating this iconic store. Lotte Duty Free is a travel destination in its own right and something we want people to incorporate into their plans and be excited to experience as part of international travel.
Back with a bang in Vietnam
In related news, Lotte Duty Free, which once closed its entire overseas store network due to COVID-19, has resumed all operations except the store at Cam Ranh Airport in Nha Trang. , Vietnam, which is temporarily closed due to airport closure.
Lotte Duty Free’s overseas sales from January to April were up almost +140% year-on-year. The retailer currently operates 19 stores in the Asia-Pacific region, including those in South Korea.
The company expects to generate overseas sales of KRW 250 billion ($197.4 million) in 2022 by strengthening existing overseas stores and opening new locations such as Da Nang, Vietnam.
Next year, it plans to further strengthen the “LDF Belt” (Lotte Duty Free Belt) encompassing the Asia-Pacific region by completing the inauguration of a new branch in Hanoi, Vietnam, and the official opening of a branch at Changi Airport, Singapore.
Lotte Duty Free entered the travel retail market in Oceania after acquiring five duty-free shops in Australia and New Zealand from JR/Duty Free in August 2018 and re-launching them the following January. The Sydney downtown store is the company’s first new store in Oceania.
Recovery of the tourism market
Lotte Duty Free said it has strategies to boost sales by product category in the wake of the recovery in the tourism sector.
Australia, which had imposed strict entry restrictions for the past two years, fully reopened its borders in February and began to seriously expand international flights.
According to the Australian Bureau of Statistics, the number of passengers entering and leaving Australia over the past month has increased tenfold year-on-year. In the case of Sydney Airport, the number of daily international flight arrivals has risen to 40, from an average of just ten in September 2021.
Australia’s tourism market is at “a turning point” in a rebound, Lotte Duty Free said. This new dynamism was spurred by the Australian government providing an additional A$60 million (US$42.6 million) in March to help the inbound tourism industry recover, the company noted.
Lotte Duty Free is committed to presenting differentiated operating strategies for each product category in line with the recovery of the tourism sector.
For cosmetics, where the average retail price will be -15% lower than the Australian local price, the company is planning a differentiated shopping experience through the region’s largest cosmetics store. This one will feature more than 60 renowned domestic and foreign beauty brands, including Estée Lauder, SK-II, La Prairie and (from South Korea) Sulwhasoo.
In the wine and spirits and watches categories, marketing is aimed at Australians and New Zealanders. The offer will reflect high regional deductibles (up to one 2.25 liter bottle in Australia and up to three 1.125 liter bottles in New Zealand).
Lotte Duty Free will introduce a specialty area of local wines and spirits and a tasting area featuring a traditional wine cellar concept. Watches are classed as a duty free item in Australia (they can be sold duty free to domestic consumers, but with GST included). The retailer is planning an associated marketing campaign targeting not only overseas visitors but Australians as well, with around ten famous brands including Omega, Breitling and Longines.
Once the Australian duty-free market recovers to a certain level, leading fashion and jewelery boutiques will be introduced to target customers with high purchasing power.
Lee Kap concluded: “The opening of the downtown Sydney store is a move that reflects Lotte Duty Free’s desire to accelerate its expansion again.
Destination Gold Coast
Duty-free retail and other business revenue streams will be the focus of a pioneering event to be held on Australia’s beautiful Gold Coast in July.
As reported, the Australian Airports Association – in partnership with The Moodie Davitt Report and Ivo Favotto’s The Mercurius Group – will host Australasia’s first-ever conference dedicated to airport retail and business issues on July 21-22. .
Registration is now open for the Airport Retail and Commercial Forum 2022 (eventsair.com). The number of delegates is limited to 200 and will be allocated on a first-come, first-served basis.