A view of Shinsegae Square at the Shinsegae Department Store main branch in Jung-gu, Seoul [Shinsegae Department Store]
A view of Shinsegae Square at the Shinsegae Department Store main branch in Jung-gu, Seoul [Shinsegae Department Store]

South Korea's major department stores have set new first-half records for foreign customer sales, putting annual foreign sales of 1 trillion won ($664 million) within reach.

Shinsegae Department Store announced Monday that its foreign customer sales reached 580 billion won in the first half of this year, a 120 percent increase from the same period last year. Its full-year foreign sales totaled about 650 billion won last year, meaning the retailer has already achieved 90 percent of that figure in the first half alone.

Lotte Department Store posted 640 billion won in foreign customer sales for the first half, putting it on track to surpass its full-year foreign sales record of 734.8 billion won last year. Lotte expects to become the first in the industry to hit 1 trillion won in annual foreign sales sometime in the third quarter.

The mix of foreign customers at Shinsegae has grown more diverse. The share of Chinese customers fell from 77.5 percent in 2019 to 48.5 percent in the first half of this year, while American customers rose from 1.1 percent to 19.1 percent and visitors from Southeast Asia and other Asian countries climbed from 4.4 percent to 14.9 percent. Sales gains were broad-based: luxury goods rose 129.3 percent, menswear 110.0 percent, womenswear 89.4 percent, cosmetics 87.3 percent and food and beverage 62.9 percent. The store's foreign-exclusive loyalty program now counts more than 300,000 members from over 120 countries.

At Lotte, foreign shoppers concentrated their spending on luxury goods and fashion. Luxury sales rose about 130 percent in the first half, while the fashion category grew 135 percent. The Lotte Tourist Membership program, a foreign-exclusive loyalty scheme launched late last year, surpassed 130,000 cumulative sign-ups in just seven months. The program has since expanded to the Jamsil and Busan main branches, with benefits extended across Lotte affiliates to improve convenience for foreign customers.

Growth has been notable at individual stores as well. Shinsegae's Centum City branch recorded a 230 percent year-on-year increase in foreign sales in the first half — the highest growth rate among its flagship locations. Lotte's main branch posted a 140 percent increase in foreign sales over the same period. Foreign customers account for roughly 70 percent of total sales at its K-fashion specialty floor, Kinetic Ground. At Lotte Town Jamsil, foreign sales rose 120 percent year on year in the first half; the Busan main branch was up 150 percent; and Lotte Mall Dongbusan climbed 170 percent.

In the second half, Shinsegae plans to step up tourism marketing targeting North America, Europe and Taiwan in partnership with the Korea Tourism Organization and the Seoul Tourism Foundation. Lotte, meanwhile, is accelerating efforts to improve the shopping experience for foreign visitors, with plans to introduce QR payment and NFC quick-pass payment in partnership with UnionPay in September — a first for the industry.

A view of the Lotte Department Store main branch in Sogong-dong, Jung-gu, Seoul [Lotte Department Store]
A view of the Lotte Department Store main branch in Sogong-dong, Jung-gu, Seoul [Lotte Department Store]

spa@heraldcorp.com