May 15, 2021

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Desired destination Obligation Absolutely free Land: ‘Flights to nowhere’ generate KW1.62 million (US$1,450) regular devote for Lotte Obligation Totally free in March – The Moodie Davitt Report

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SOUTH KOREA. Duty free searching on so-termed ‘Non-landing tourism flights’ or ‘Flights to nowhere’ produced common sales of KW1.2 million (US$1,075) for each consumer for Lotte Duty Totally free in the initial quarter of 2021, with the March figure soaring to KW1.62 billion (US$1,450), the retailer discovered right now.

With outbound and inbound vacation closely limited by the pandemic, this kind of flights have develop into a novel way for travellers to expertise the pleasure of flight whilst also benefiting from duty free allowances. Because Asiana Airways supplied the very first destination-a lot less flight on 12 December, seven airways have operated 75 flights to nowhere that have attracted about 8,000 passengers, Yonhap Information Company noted now, citing the Ministry of Land, Infrastructure and Transportation.

Location Duty Free Land: Two travellers demonstrate off their buys

“As with overseas departures, obligation free purchases are out there, and more and more passengers use it as an option for purchasing,” Lotte Obligation Free mentioned. “The unit selling price of travellers on a non-landing tour is three occasions greater than that ahead of the coronavirus. The tariffs imposed on surplus [i.e. above the duty free allowance] can also be reduced by -30% (up to KW150,000/US$134) through voluntary reporting, so the burden is not higher.”

At the moment, the responsibility absolutely free limit for every Korean nationwide is US$600 (around KW670,000), and travellers can acquire further tax- and responsibility totally free rewards up to a carton of cigarettes, 1 litre of alcoholic beverages less than US$400, and a 60ml fragrance.

This graph shows the outstanding month-on-month gross sales for every customer expansion generated by the ‘non-landing tourism flight’ notion. Click to enlarge.

Some 1,600 such passengers ordered from Lotte Obligation No cost in March, somewhere around a few occasions larger than in December 2020 when non-landing tourist flights very first commenced. March profits surged by +25% when compared to the former month, driven by major promotional activity held in association with the seven taking part airlines, Lotte Duty Absolutely free.

Magnificence category dominates product sales although on the web share spikes

Cosmetics and fragrances have been Lotte Duty Free’s dominant category throughout all channels in the initially quarter, making 45% of whole product sales, adopted by trend and leather-based with 29%, watches and jewellery at 12%, and alcohol and cigarettes with 5%.

A Lotte Obligation Free of charge spokesman mentioned, “Before Corona, cosmetics and perfumes have been 35% of full revenue of Korean buyers, and watches and jewellery were 5%. So we are promoting a whole lot of watches, jewellery, baggage, sneakers and so on.”

On the web product sales produced 60% of Lotte Obligation Free’s sales in the quarter, adopted by downtown stores with 36% and airport stores at just 4%. The retailer’s withdrawal from its liquor & tobacco operation at Incheon Intercontinental Airport Terminal 1 in early March was a big issue in that minimal share. At this time, all flights for non-landing vacationer flights are departing from Incheon Worldwide Airport T1

Gen Z customers represented some 50% of shoppers, although ladies accounted for 56% of purchasers.

The pandemic’s affect – and Lotte Responsibility Free’s swift adaptation to it – can be seen in the dominant share that on the internet income now symbolize. In March 2019, when Martin Moodie interviewed Lotte Responsibility Absolutely free CEO Kap Lee, ecommerce represented 25% of the retailer’s product sales, about double the share of 5 a long time before. For Q1 2021 the channel has climed to 60%. Click to enlarge.

Revolutionary advertising and VIP constitution flights travel expending

In mid-March 2021, Lotte Obligation Absolutely free hosted an celebration that available initially-occur, to start with-served, non-landing tour tickets to major consumers of the Myeong-dong downtown shop when purchasing a lot more than US$550 of goods. The Air Busan flight that departed from Incheon on April 3 and 10 and returned above Japan’s Tsushima Island (the location for the smash-strike PlayStation 4 game Ghost of Tsushima) been given a solid reaction, with a full of 260 seats sold out throughout each days.

Who would have imagined at the begin of 2019 that Lotte Responsibility Free of charge would develop into an inflight retailer? But this is not inflight procuring as we understood it, as Lotte Duty Free pivots quickly to adapt to a environment where by barely just about anything is normal. (Over) Cabin crew attract the blessed winners of a sweepstake.

Passengers applying these constitution flights spent all over KW1.2 million on normal, on par with the normal non-landing flights, but shoppers around 40 accounted for 86% of the full when 62% ended up ladies. The buying attributes of VIP shoppers at Lotte Duty Cost-free were “remarkable”, the retailer claimed. Fashion and leather was the leading classification, accounting for 56% of income, adopted by cosmetics and perfumes with 24%, liquor and cigarettes (6%), and watches and jewellery (4%).

Aventus from Creed Ultra High definition Pressed Powder Established by Make Up for Ever The POREfessional Set from Advantage, Biotherm Homme’s Aquapower Established and UV Professional Milky Vivid by Lancôme prime the very best-providing list from the on the net product sales to travellers on the ‘Flights to nowhere’

Lotte Responsibility Free explained that it is contemplating more constitution operations many thanks to the enthusiastic assistance for the thought.

The travel retailer has also introduced a range of advertising things to do these types of as offering airline affiliate marketers revenue and cost-free items, upgrading the membership amount of Lotte Net Obligation Free, and web hosting inflight prize draw functions in connection with all 7 Korean airways that perform non-landing tourism flights. At the finish of April, Lotte Lodge and Asiana Airlines will launch a solution that brings together resort lodging, air vacation and duty cost-free shopping.

Lotte Duty Cost-free partially reopens Gimpo and Gimhae airport outlets to provide non-landing flights

Following the Ministry of Land, Infrastructure and Transport’s modern announcement that it would make it possible for non-landing tourism flights at regional global airports such as Gimpo, Gimhae and Daegu airports from May perhaps, Lotte Responsibility Totally free, which has stores in Gimpo (Seoul) and Gimhae (Busan) airports is partially re-opening the outlets in accordance with the planned flight schedules.

Lotte Obligation No cost Head of the Platform Business Division Lee Jung-min reported, “Lotte Responsibility No cost strategies to proceed to showcase various activities dependent on the industry’s largest airline community to satisfy the responsibility totally free procuring calls for of Korean shoppers.”

 

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