building a sustainable business - tfwa...(shoppertainment)* * shopping + entertainment fig....
TRANSCRIPT
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Building a sustainable
business in Korean Duty-Free &
Travel/Tourism
Yang Soung-Hoon
Professor
Silla University
Market Watch : South Korea
20 October 2015
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Table of Contents
1. Introduction
2. Current trends in the Korean market
3. Building a sustainable business
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I. Introduction
Duty-free shops and
tourism business SHARE…
same customers
(SHOPPLERS or Tourisumer)
and the same products
(SHOPPERtainment)*
* Shopping + entertainment
Fig. Myong-dong, one of Korea’s hottest tourism spots.
Tourist information center, overlapping with shopping centers
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II. Current trends in the Korean Market
Rush to Korea:
YOUKE (遊客), Chinese Tourist
免税店 ブルゴギ
Inbound Chinese Tourist in Korea
6.1 M No 1 (40%)
$2,094 ($1,272)
69%
5
6
816
132
177
28
127
38 15 4.4
2014
2015
China Japan South Asia Europe
& US Source: Korea Travel Association
Rapid decrease of overseas tourist
reservations during the MERS outbreak
leading to BAKUKAI syndrome in
Japan
(暴買い)
July and August
Number of tourists (unit: Thousand)
*
* Comparing shopping spree to bomb, in Japanese
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To rebound from the adverse
effect of MERS: • Government commits public money,
including tourism fund
• Journalists and travel agencies were
invited to Korea
• Hosting KOREA Grand Sale tourism and
shopping festivals.
• PR & Promotion by Korean entertainers
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Why did the duty-free shop giants Shilla and
Lotte rush to partner the Chinese tour
operators?
•Evidence of strong ties with the tourism industry.
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Lotte aggressively opens duty free-shop at
the tip of 123 floor in the middle of upcoming
renewal of right to operate
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WATCH OUT!
Facial mask packs on sale
at duty free shops
Ⅲ. Building a sustainable business
• Be sure to display new items, which can
encourage your customers to stay in
your duty-free shops until the final
departure call
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Mask packs are one of the hottest items purchased
by inbound Chinese travelers in Korea
(32% of total tourism spending)
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L&P Cosmetics strategically
opened a new distribution channel,
the duty free shop
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Two:
No more duty free shop!!
Create Duty- MAX Shops to
maximize your revenue
Capitalize on your Asian customers’
culture for your business.
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# 1 - Asian tourists feel they have a
duty to commemorate their
precious time abroad
Souvenir, the evidences of intangible
travel experiences (Gordon, 1996)
ex. Japan:
お土産(Omiyage)
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#2 Duty to express your apologies to
family and friends that did not
accompany you on your trip. Also,
tangible souvenirs as a means to
express your thanks to your business
partners.
Strong collectivism and Power distance
(Hofstede, 1980)
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Three: You are not alone in the business.
Make your employee more aware of
the cultural aspect of tourism.
Be knowledgeable of the shopplers’
behavior at your stores.
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They are…under time pressure
for last minute shopping. - Suggest assorted alternatives to allow
shopplers’ to make decisions fast.
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Packaging really matters.
Shopplers tend to have trouble with their
fully packed carriers at airports. Provide
them small- sized packages with variety.
• To create synergies between the duty-free
business and tourism, we should be more
aware of each other because we are in the
same business domain.
• Korea learned expensives lesson from the
MERS outbreak, after which the sharp
decrease in tourist numbers put business
at duty free stores at risk
Summary
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-Three tips are recommended for sustainable
business between our two industries.
#1. Do not hesitate to introduce new selling
items that make tourist stay in your property.
#2. Understanding culture will guide you to
enhance sales figure.
#3. Shopper + tourist-friendly approaches
are needed in your sales strategy.
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Thank you
Yang Soung-Hoon
Professor
Silla University
Market Watch : South Korea
20 October 2015