Another Downtown Duty-Free Store For Lotte, This Time It Is The Largest In Vietnam

South Korea’s Lotte Duty Free has opened its first downtown duty-free store in Vietnam in the city of Da Nang, the coastal resort that has become a hot spot for South Korean travelers.

At almost 22,000 square feet, Lotte’s new unit, which opened on Tuesday, is the biggest duty-free shop in the country. It is located at VVMall in the My Khe area which sits in the middle of the popular beach strip that runs north to south. Lotte is hoping to generate $38 million annually at the store, but only once the Vietnam tourism market gets back on its feet after being decimated by Covid.

The travel retail giant—whose core revenue comes from its home market—is pushing ahead with international growth again now that the Covid crisis has abated. With the Da Nang unit now open, Lotte Duty Free has 20 duty-free stores across seven countries in Asia Pacific.

In May, the retailer, first established in 1980, opened its first downtown store in Sydney, Australia, and in October, in an effort to drive a sales revival in Seoul and at its flagship store in Ginza, Tokyo, Lotte ramped up promotions to support travel to Japan as visa-free visits were relaunched on October 11.

In mid-2020, during Covid, the South Korean retailer also launched its wine and spirits concession at Singapore Changi Airport by going online as there were no passengers at the hub. The company claims it was the industry’s first web duty-free store supporting five languages: Korean, English, Chinese (simplified and traditional), Japanese and Vietnamese.

Vietnam may hold the key to success in the coming 12 months. Before the pandemic, the country was Lotte Duty Free’s top international market “by sales, size of the stores and everything” according to a company spokesperson. Lotte has three other stores in the market, just not downtown until now. In 2017, the retailer started duty-free operations at Da Nang International Airport, followed by two more stores in Vietnam: one at Cam Ranh Airport in 2018 and another at Noi Bai Airport in 2019.

A home from home for Koreans

Commenting on the current conditions and which nationalities would be key to sales growth at VVMall, the spokesperson told Forbes.com: “The biggest spending group will be Koreans. Currently, one of every two foreign tourists visiting the city is Korean.”

According to seat capacity analyst OAG, over the period from October 2021 to September 2022 the route between Seoul Incheon Airport in Korea and Da Nang is the second most competitive in the world. While Vietjet is the largest carrier operating 28% of the capacity, the rest is fairly evenly distributed which should help to keep fares low and encourage more tourist traffic.

For South Koreans visiting Da Nang, Lotte Duty Free’s new store will feel reassuringly familiar. It has been designed for their needs and is a travel destination in its own right featuring more than 200 brands of cosmetics, spirits, jewelry, watches, and fashion. Favorite Korean brands like Cheong Kwan Jang, Sulwhasoo, and The History of Whoo are present as well as Vietnamese domestic products and souvenirs such as pearls, coffee, and local foods.

While the Da Nang downtown store gives Lotte Duty Free a strong footing in the reviving Vietnam market, Lotte Duty Free’s CEO Kap Lee wants to do more than simply maintain a leading position in Southeast Asia. “We will continue to expand our business with continued investment and further foreign expansion,” he said.