From department stores to convenience stores, regardless of sector, one of the key themes in retailers' business plans for next year is foreigners. With consumer polarization continuing and domestic demand weak, they see active efforts to attract foreigners visiting Korea as essential for business growth.
On the 24th, according to Lotte, Shinsegae, and Hyundai Department Store, the share of foreign customers in department store sales hit a record high through the end of November this year. At Shinsegae Department Store's three main locations — the main store, Gangnam, and Centum City — foreigners accounted for 13.5% of sales. At Hyundai Department Store's flagship locations The Hyundai Seoul and the Trade Center store, foreigners accounted for about 20% of sales.
The growth rate of foreign sales is also high. Lotte Department Store said the year-over-year growth rate of foreign sales this year exceeded 35%. Hyundai Department Store's foreign sales growth rate is around 30%. A Lotte Department Store official said, "This year is the year with the highest share of foreign sales in total sales before and after COVID-19."
Convenience stores are seeing a similar trend. The GS25 convenience store chain said sales to foreign tourists hit an all-time high this year. Sales tallied through foreign payment methods such as Alipay, WeChat Pay, and UnionPay from the start of the year through the end of November rose 74.7% from a year earlier. During the same period, sales to foreign tourists at CU convenience stores increased 107.5%.
With this in mind, the retail sector has chosen securing foreign consumers as one of its growth strategies for next year. The number of foreign tourists visiting Korea has surged on the back of the Korean Wave, including K-pop. The Korea Tourism Organization (KTO) expects the number of foreign visitors to Korea this year to surpass a record 20 million. As of the end of Oct., about 15.82 million foreign tourists had visited Korea, already exceeding pre-COVID-19 levels.
Retailers believe standing at the key points of foreign visitor spending in Korea is the way to pursue business growth next year. With high inflation persisting amid heavy household debt, domestic consumers' spending power is waning. Nor is it easy, as it is for manufacturers such as food companies, to make quick inroads into overseas markets. As the saying goes, "distribution cannot cross borders," even retailers firmly established at home find it difficult to succeed under the same banner overseas.
As a result, retailers are exploring various methods to win over foreign consumers. To provide a convenient shopping experience, they have strengthened interpretation and translation services. Lotte Department Store's Jamsil store introduced an artificial intelligence (AI) interpretation service for foreign tourists. Hyundai Department Store also launched HEYDI, an AI shopping assistant that supports about 10 languages, including English, Chinese, and Japanese. CU convenience stores introduced AI interpretation services at select locations starting in Apr.
They are also bolstering memberships. Hyundai Department Store introduced H Point Global, an integrated membership exclusively for foreigners. CU convenience stores launched a partnership service with Japan's leading membership program Ponta Point. Ponta Point, usable at more than 300,000 locations including Lawson, has 120 million members worldwide.
They are also running marketing campaigns by distributing guidebooks. The GS25 convenience store chain teamed up with the global Hangul game playbook "Yaho" to create the "K-convenience store guidebook." The guidebook was distributed free of charge at about 20 GS25 locations in areas popular with foreign tourists, including Incheon Airport, Myeong-dong, Seongsu, and Jeju. A GS Retail official said, "We are providing a guidebook packed with various information, including Seoul travel routes for foreign tourists, how to use convenience stores, rankings of popular products, and artists' favorite snacks."
Lotte Department Store is focusing on discount events. A representative effort is partnering with major global payment providers such as Alipay, WeChat Pay, UnionPay, and LINE Pay to offer discounts.
Shinsegae Department Store is focusing on content. It believes intellectual property (IP) collaboration content and experiential pop-up stores (temporary shops) are the best tools to draw foreigners visiting Korea. In Nov., it unveiled an exclusive pop-up store for the "2025 MAMA Awards," a leading global K-pop awards show. It also hosted an exclusive "Squid Game Season 3" pop-up and a pop-up for the idol group SEVENTEEN.
Kim Nando, an emeritus professor of consumer science at Seoul National University, said, "Rather than advancing into overseas markets, holding the key points of spending by foreigners visiting Korea has a higher chance of success and a lower chance of failure," and added, "The retail industry should explore various marketing tools so that, like CJ Olive Young, stores become must-visit destinations for people coming to Korea."