Lee Yoo-jin and Lee Ha-yeon
South Korean duty-free shops delivered record-high revenue for three consecutive months in March despite a new regulatory action from China.
Combined sales of Korean duty-free shops reached 2.17 trillion won ($1.91 billion) last month, marking the highest monthly revenue after extending gains for the last three months, according to the Korea Duty Free Shops Association on Monday.
The number of visitors to Korea was tallied at 1,696,201, the largest since Beijing’s ban on group tours to the country in March 2017 in retaliation against Seoul’s installment of U.S. anti-missile shield system.
The continued growth largely owed to mass purchases by individual merchants from China buying duty-free goods in bulk to profit from reselling them in the mainland. Inner city tax-free shops also increased sharply over the year.
Industry experts earlier expected that the shuttle trade by individual merchants would be discouraged this year as the Chinese government announced to curb tax-free incentives for personal cross-border retail purchases from the beginning of 2019.
Duty-free operators offered various perks and discount options as not to lose the big-spending customers.
Cosmetics stocks were lifted following the news of growth in duty-free sales. Shares of Korea’s leading beauty brand Amorepacific on Monday rose 7.57 percent to close at 234,500 won, and those of cosmetics original development manufacturer Kolmar Korea 2.63 percent up at 78,100 won.
Shinsegae shares finished 0.78 percent higher at 325,000 won, while Hotel Shilla ended 0.48 percent lower at 104,500 won.