Liquor, once considered a must-stop for duty-free shopping, has lately lost some of its appeal. In particular, there is a growing sense, centered on online duty-free stores, that there is no need to buy alcohol at duty-free shops.
As the high exchange rate trend (a weaker won) continues and big-box stores and convenience stores run frequent, ongoing liquor discounts, the price gap between duty-free and domestic retail channels has noticeably narrowed. On top of that, changes in how consumers drink alcohol are also cited as a factor amplifying the shift.
According to the industry on the 22nd, liquor sales are visibly declining among items sold at online duty-free shops. As of the 17th, a look at The Shilla Duty Free's daily online sales rankings showed "Johnnie Walker Blue" at No. 4 and "Kavalan Vinho Barrique Solist" at No. 5 among all products. By contrast, Shinsegae Duty Free had no liquor products in the top 10, and at Lotte Duty Free only Johnnie Walker Blue placed, at No. 5.
This differs from last year. Until last year, numerous premium whisky brands such as Balvenie and Dalmore, as well as Chinese liquors like Yanghe, regularly ranked in the top 10 for online duty-free sales. The industry says, "Liquor's presence at online duty-free shops has weakened overall."
The first reason cited is price. Buying liquor at an online duty-free shop means ordering before departure and picking it up at the airport pick-up counter. From the consumer's standpoint, you can't help but compare prices with domestic retail over ample time to see whether it's truly a deal. In this process, the competitiveness of price and bundles is laid bare. The exchange rate has also risen. As of the 19th, the won-dollar rate closed at 1,478.9 won.
Until now, the perception was strong that buying high-end whisky and premium wine at duty-free shops was advantageous because the higher the price, the larger the tax portion. In effect, there was an accepted formula that duty-free liquor was clearly cheaper than domestic retail prices. Recently, however, as big-box stores have made wine and whisky discounts routine, that formula is wobbling. For mid- to lower-priced whiskies in particular, there are even cases where the promotional price at supermarkets is cheaper.
For example, Lotte Mart is running discounts on 10 Diageo whiskies through the 24th, and "Johnnie Walker Black Ruby" (1,000 ml) is being sold for 64,900 won per bottle. The same product is 77,449 won at The Shilla Duty Free. The gap widens further when additional discount conditions are factored in. At Lotte Mart, buying two or more promotional items triggers an extra discount. In that case, the per-bottle price of Johnnie Walker Black Ruby drops to 45,430 won.
Shifts in consumption trends are also weighing on duty-free liquor. Rather than collecting high-priced bottles, recent drinking habits have moved toward easygoing, low-alcohol beverages, daily wines, and distinctive small-scale brands. More consumers are looking for drinks to enjoy casually at home.
But duty-free liquor assortments still skew toward high-proof whiskies and global big brands. An industry official said, "As the trend spreads of not preferring purchases of expensive liquor to keep like souvenirs, the presence of the duty-free liquor category is naturally shrinking."
Inconvenience along the travel route also can't be ignored. If you buy liquor at a duty-free shop when departing, you have to carry it from that point on. If you don't drink it overseas and bring it back into Korea, you must also consider the duty-free allowance for alcohol. Under current rules, duty-free applies up to 2 liters per person and up to $400. Since March, the limit on the number of bottles has been removed, but the price and volume thresholds remain a burden.
One consumer said, "Sometimes it's cheaper to buy at overseas liquor shops," adding, "For convenience, it's better to use the duty-free shop at arrival or the airline's duty-free."
An industry official said, "The decline in duty-free liquor's appeal is not simply due to weaker consumer sentiment," adding, "As pricing structures, retail environments, and consumption patterns change across the board, the very reasons to buy alcohol at duty-free shops are being redefined." Whether duty-free operators can respond well to the new consumption trends bears watching.