Surging Chinese and Russian visitor numbers suggest a strong future for Korean travel retail giant Lotte Duty Free’s new store at Cam Ranh International Airport in Nha Trang, opened on 30 June.
As reported, Lotte Duty Free has been awarded an exclusive ten-year duty free concession. The contract to operate some 1,680sq m of departures and arrivals space runs until mid-2028.
Lotte Duty Free CEO Jang Sun-wook opened the store in the airport’s new terminal on 30 June.
The store sells a wide range of traditional duty free items, including cosmetics, fragrances, watches, fashion, liquor and tobacco. The departures shop, sited directly in front of the main gates, covers 1,507sq m and the arrivals store 173sq m. Key Korean brands include The History of Whoo and Sulwhasoo, while blockbuster international names include Saint Laurent, Dior and Jo Malone.
It is Lotte Duty Free’s second operation in Vietnam after the retailer’s opening at Danang Airport on 1 November last year. The company expects to generate sales of around 700 billion won (US$625.3 million at current exchange rates).
Cam Ranh International’s new two-storey terminal covers 50,000sq m. It is expected to handle up to 8 million outbound travellers by 2030.
Nha Trang is the most popular tourist destination in central Vietnam. Some 2 million foreign tourists visited the area in 2017, a number set to rise by some 20 percent this year. Critically from a retail perspective, Chinese nationals comprise the largest visitor group with 58.9 percent of arrivals, ahead of Russians (27.4 percent). Koreans only make up around 2 percent of arrivals, but that number is expected to climb rapidly in the future as Jeju Air has added a new service to the city.
Several mid-to-long-term infrastructure development projects are set to increase tourism. A new terminal is being built at the airport and more 4-5 star hotels are being added locally. Six shopping malls are in development while plans are well advanced for the area to develop an eco-tourism programme, including spa and craft village facilities, plus an international-class marina and resort.
Lotte Duty Free said that corporate social responsibility will be key to its approach. For example, the company is cooperating with local authorities to help children receive surgery and other treatment at medical facilities in Danang. In October 2017, the company funded surgery for six Vietnamese children, and plans to continue the programme this year.
During July, Vietnamese women from multicultural families are planning a one-off event to invite about 100 parents to the women’s homeland in Vietnam. Lotte Duty Free will help fund the programme.
With plans to open further stores (including downtown) in Hanoi, Ho Chi Minh City and Danang, Lotte said it hopes to become Vietnam’s largest duty free brand within the next three years.
Jang said the company aims to post a profitable return in year one. “We are especially focused on making a strong local social contribution,” he said. “I will do my best to create a strong brand.”