18.94 million. That's the number of foreign visitors to Korea last year, the most on record. As the number of visitors surges, retailers are moving quickly to target them. The three brands known as so-called "Ol-Da-Mu" stores (Olive Young, Daiso, and Musinsa) have emerged as new powerhouses in retail. As so-called "Ol-Da-Mu" stores (Olive Young, Daiso, and Musinsa) expand their businesses on the back of foreign interest and keep up their growth, the range of signature Korean purchases is gradually diversifying. This paper examines the features of spaces newly added to foreign shoppers' routes and the expansion trend, and looks at channels being discussed as the next so-called "Ol-Da-Mu" stores (Olive Young, Daiso, and Musinsa). [Editor's note]
With the surge in foreign visitors to Korea, department stores in key commercial districts are also drawing tourist traffic. As price competitiveness for overseas luxury and premium brands stands out, they are gaining attention as complex shopping spaces where visitors can also enjoy food and beverage (F&B) and experiential content. Department store operators are reinforcing services and perks for foreign tourists to capture the growing demand.
According to industry sources on the 11th, the three domestic department store groups all saw a sharp jump in foreign sales during last month's Lunar New Year holiday. Lotte Department Store's foreign sales from Feb. 13 to 18 rose 120% from the previous Lunar New Year holiday. Sales to customers from the Greater China region, including China and Taiwan, increased 260%, hitting an all-time high.
Shinsegae Department Store and Hyundai Department Store also saw foreign spending surge during the same period. Sales to Chinese customers at Shinsegae Department Store's main store jumped 416% from a year earlier, and sales to Chinese customers at The Hyundai Seoul rose 210%. Analysts say the impact came from the longest-ever nine-day Lunar New Year break this year and more Chinese tourists choosing Korea over Japan amid China-Japan tensions.
Last year, the department store industry enjoyed an unusual boom thanks to the rise in foreign visitors to Korea. Foreign sales at the three department store groups hit a record and topped 2 trillion won combined. Hyundai Department Store posted sales in the 700 billion won range, up about 25% from a year earlier; Shinsegae Department Store recorded the mid-600 billion won range, about 3.5 times the 2023 figure. Lotte Department Store's foreign sales came to 734.8 billion won, up 20% year over year.
There is analysis that the recent, persistent weakness of the won is translating into higher foreign spending at department stores. Thanks to the exchange rate effect, the price burden for luxury goods as well as high-end designer and sports brands has eased, leading more foreigners to shop at department stores rather than only at duty-free shops.
The quick rollout of new products by luxury and premium brands and the breadth of their lineups are also cited as factors drawing foreigners. As Korean idols and actors serve as models or ambassadors for global luxury brands, more foreign tourists are visiting stores in Korea.
The shift of department stores from simple shopping venues to experiential consumption spaces is also bringing in foreign customers. As more complex content emerges that allows visitors to enjoy F&B outlets, pop-up exhibitions, and brand experience zones at once, their appeal as tourist itineraries is growing.
Department store operators are also moving to strengthen services aimed at foreigners. Hyundai Department Store has begun operating tour programs that use layover time at Incheon Airport to let visitors enjoy shopping and culinary culture experiences. The aim is to enable tourists transiting through Korea to visit downtown department stores during their layovers and enjoy both shopping and experiences.
Promotions and perks for foreigners are also expanding. Lotte Department Store's "Tourist Card," a membership program exclusively for foreign tourists, surpassed 40,000 issuances just two months after launch. Benefits include a 5% discount on purchases of 100,000 won or more, transit card functionality, and perks at affiliates such as Lotte Duty Free and Lotte Mart.
Shinsegae Department Store offers memberships for foreigners based on annual purchase amounts: VIP (5 million won), VVIP (10 million won), and SVIP (30 million won). Within this year, it plans to add VIP benefits and establish lounges exclusively for foreign VIPs at key stores.
Hyundai Department Store, through its H Point Global membership for foreigners, provides convenience services such as restaurant reservations, interpretation and translation, and mobile tax refunds to foreign visitors. H Point Global members can receive discount coupons based on purchase tiers.
Orin-a, a senior analyst at LS Securities, said, "It's a similar pattern to how Japan's retail sector, centered on department stores, grew in 2022–2024 during the weak-yen phase as foreign spending increased," adding, "With the influx of foreigners driven by K-content and the exchange rate effect working simultaneously, the improvement trend in department store earnings is likely to continue in the first half of this year."