Exclusive product launches ranging from whiskey to fashion and beauty are fiercely competing in the domestic duty-free industry. With duty-free conditions worsening due to a decline in average spending per foreign tourist, companies are seeking to strengthen brand competitiveness and expand sales simultaneously by promoting exclusive products.
On the 8th, the duty-free industry said Shinsegae Duty Free recently collaborated with Scotland's single-malt whisky distillery Glenallachie to launch two duty-free exclusive products. The products are Glenallachie Single Cask 2012 12-year PX and Glenallachie Single Cask 2012 12-year Oloroso, of which 716 and 339 bottles were produced, respectively.
Hyun Jeong-hoon, Shinsegae DF's liquor buyer, said, "To launch the products, we reviewed several whisky samples from the distillery and selected and contracted the casks (oak barrels·cask) suitable for the domestic market."
Shinsegae Duty Free last month also collaborated with Kim Chang-su, the master of Korea's first whisky distillery Kim Chang-su Whisky Distillery, to introduce an exclusive product, Kim Chang-su Whisky Travel Exclusive. Earlier in July, it exclusively listed the product Kim Chang-su Choice 2–Speyside on its online mall, and 130 bottles sold out immediately after listing. In February this year, Shinsegae Duty Free collaborated with Taiwan's independent bottling whisky brand Dongfang to release three exclusive products.
In January, Lotte Duty Free collaborated with Taiwanese whisky brand Kavalan to launch two exclusive products in the Grand Reserve series. To do so, Lotte Duty Free signed a strategic business agreement last year with Kavalan's manufacturer King Car Group and continued consultations to develop the products. The Shilla Duty Free also collaborated with Scotch whisky distillery Bruichladdich in March to prelaunch some products exclusively.
Competition for exclusive products is fierce in other categories such as food and cosmetics. Earlier this month, Shinsegae Duty Free became the first duty-free retailer worldwide to carry Louis Vuitton's first beauty collection, La Beauté Louis Vuitton.
In May, Shinsegae Duty Free opened a Louis Vuitton duplex store spanning two floors at Incheon Airport and brought in La Beauté Louis Vuitton there to strengthen brand competitiveness. Last month, Shinsegae Duty Free also introduced Prada Beauty's cosmetics line to its downtown duty-free store for the first time in Korea on the 10th floor of its Seoul Myeongdong branch.
In November last year, The Shilla Duty Free opened Guerlain's top-tier store, Guerlain Ultimate Boutique, at Incheon Airport's Terminal 2, the first global airport location for the brand. Through the boutique, The Shilla Duty Free also became the first domestic duty-free shop to sell a hair care line and a high-end perfume collection exclusively.
In January, Lotte Duty Free collaborated with Singapore's Basha Coffee to launch the global exclusive Adventure Coffee Drip Bag Set. The product assembled six signature items from Basha Coffee into a 25-piece drip bag gift set. A Lotte Duty Free representative said, "We participated in the entire product development process, from product composition to name selection and design."
The intense competition over exclusive product launches in the duty-free industry is driven by their ability to attract customers. Currently, duty-free shops' profitability has fallen sharply due to changes in foreign tourists' consumption patterns. According to the Korea Duty Free Shops Association, about 5.13 million foreign visitors visited domestic duty-free shops in the first half of this year, a 16.1% increase from 4.42 million in the same period last year. However, during the same period, foreign-targeted sales by domestic duty-free shops amounted to 48,415 billion won, a 34.5% decrease from 73,969 billion won in the same period last year.
Although exclusive products released by duty-free retailers are produced in limited quantities, many customers visit offline stores or online malls to buy them. This naturally leads to increased sales of other items as well.
Collaborating with famous foreign brands to launch exclusive products itself demonstrates the global competitiveness of the duty-free brand. A duty-free industry official said, "If you collaborate exclusively with global luxury companies to introduce premium categories such as high-end perfumes, watches and jewelry, you can attract VIP customers and give the brand emotion and value."