Just a few days shy of the deadline to apply for a Seoul duty-free business license, E-Land announced plans to join the fray.
The conglomerate, whose businesses span from retail and fashion to restaurants, said Thursday that it plans to build a duty-free shop at a property near the hip Hongik University area in Mapo District, northwestern Seoul, where it is currently working with GS Engineering & Construction to build a luxury hotel.
The company will collaborate with the area’s 20,000 shop owners, street performers and artists to give a new perspective on duty-free shopping, setting itself apart from other competitors that have located their shops in larger, more commercial areas with other big-brand stores.
It has plans to build an outdoor performance arena by the shop where young artists, independent bands and even K-pop stars will be invited to perform daily. E-Land will also work with the district’s well-known shops and restaurants to draw more foreign tourists to the neighborhood, the company said.
It recently signed a memorandum of understanding (MOU) with Wanda Tourism and Dufry Duty Free for collaborations on its duty-free business. Wanda Tourism, a unit of Wanda Group, is one of the biggest tour agencies in China, and E-Land expects the partnership to help bring in more than 1 million VIP customers from the country per year. Dufry, a Swiss duty-free franchise and the world’s biggest duty-free store operator with over 2,000 worldwide, will share luxury retailing strategies with E-Land.
“Around 70 percent of local duty-free sales come from the Chinese,” said an E-Land official. “As an influential brand in China with over 20 years of Chinese retail experience under our belt, we will expand the size of the local duty-free market.”
The company currently operates 44 brands and 7,300 stores in China, ranging from restaurants to shops specializing in fast fashion brands.
Competition for duty-free licenses is getting fiercer by the day, with almost every major conglomerate – including Lotte, Shinsegae, Hyundai, Samsung-affiliate Shilla, SK Networks and Hanwha – having submitted a bid.
Sluggish sales at other retail outlets, including department stores and discount retail chains, have forced companies to shift their focus to duty free, which offers double-digit profit margins and growing sales. According to the Korea Customs Service, Korea’s duty-free market was worth 8 trillion won ($7.2 billion) as of last year, compared to 4.8 trillion won in 2010.
Korea Customs Service is scheduled to make a decision about the licenses in July, two of which will be given to conglomerates and one to a midsize firm.
