Aiming to be No. 1 in Oceania in five years
Lotte Duty Free, the No. 1 duty-free company in Korea, has entered the Oceanian market for the first time among Korean duty-free shop operators.
Lotte Duty Free said on August 21 that it signed a contract to acquire JR DUTY FREE in Australia. Jang Sun-wook, CEO of Lotte Duty Free, said, "The signing of the deal is a stepping stone for Lotte Duty Free to move into new markets beyond the Asian region. We will continue our efforts to become a global number one tax-free enterprise by pursuing overseas business in various ways."
JR Duty Free, which is to be acquired through the deal, is based in Melbourne, Australia. It has six branches in Oceania and five branches in Israel, and it recorded annual sales of 690 billion won (US$575 million) last year.
Among them, the stores Lotte Duty Free will acquire are five, including four in Australia (Brisbane Airport, Melbourne city, Darwin Airport, and Canberra Airport) and one in New Zealand (Wellington Airport).
Lotte said the deal was concluded with the aim of opening the stores within this year.
The Australian tax-free market is estimated to be about 1.4 trillion won (US$1.16 billion) last year, and the number of outbound travelers is increasing by more than 10% per year.
Global duty-free companies such as Dufry (Switzerland), DFS (the US), and Lagardère (France) operate shops in major airports and cities in Australia, and Lotte Duty Free, the second largest company in the world, plans to join them and establish a solid foothold.
Lotte Duty Free has operated seven overseas stores starting from Indonesia in 2012, including Ginza and Kansai airports in Japan, Guam airport in the US, Jakarta city in Indonesia, Bangkok city in Thailand, Da Nang Airport and Nha Trang Cam Ranh Airport in Vietnam.
In the first half of this year, Lotte Duty Free’s total sales recorded 2.7 trillion won (US$2.25 billion), a 29% increase from last year. Domestic sales accounted for 2.6 trillion won (US$2.16 billion won).