SOUTH KOREA. The vast majority of Chinese customers at South Korean duty free stores are now in their 20s and 30s, according to retailers’ latest figures. The statistics underline an accelerating shift from the previous reliance on middle-aged Chinese travellers. The number of younger Chinese travellers is rising and they are attracted to South Korea because of the country’s pop and drama culture and the shopping experiences on offer, according to the retailers. South Korean cosmetics brands such as Sulwhasoo are very popular among younger Chinese travellers The Shilla Duty Free confirmed to The Moodie Davitt Report that the 20-30 age group accounted for 76.5% of Chinese customers at its flagship duty free store in Seoul in the first nine months of this year. Chinese customers in their 40s and 50s made up just 21.7% of the total. The retailer provided The Moodie Davitt Report with some telling analysis of the evolving age mix among Chinese shoppers during the Chinese National holidays (see table below). Customers under the age of 40 only accounted for 35.7% of total shoppers in 2009 and just 30.3% of sales that year. But by 2012 the age group’s ratio of total shoppers had risen to 59.3% (and 59% of sales). By this year’s National holidays, those under 40 constituted 77.1% of customers and 73.1% of sales. “The 20s age group has shown remarkable growth in the last eight years: from 3.1% [of sales] in 2009 to 35.9% in 2016,” The Shilla Duty Free said. “The 40-50 generation, who used to be the main customers, diminished from 45.3% of sales to 21.8% during the same period.” Lotte Duty Free said that Chinese aged under 40 represented 86% of clientele at the retailer’s duty free stores in the first half of this year, while those in their 40s accounted for just 13%. However, the retailer said the numbers were derived exclusively from its membership database, creating a sampling bias “because there is a larger number of Chinese customers who are not in our membership”. Additionally, customers in their 20s and 30s are more accustomed to registering and using membership services, Lotte said. “The actual percentage of 20s and 30s customers would be lower if we could take non-registered customers into account,” a spokesperson stated. “But it is not possible to count the real number of non-registered customers so [the above figure] is the only option we can provide.” Lotte Duty Free says the figures on Chinese consumers are slightly distorted because of the method of collecting the data Shifting preferences Hotel Shilla noted that Chinese Millennials were the main visitors to The Shilla Duty Free store in Seoul during Chinese national holidays in 2016. Customers in their 20s and 30s accounted for 72.7% of all Chinese visitors – rising from 30.2% in 2009. The 20s age group in particular has shown “remarkable growth” in the last eight years, rising from 3.1% in 2009 to 35.9% in 2016. Customers in their 40s and 50s have diminished from 45.3% of the total to 21.8% during the same period. Shilla iPark Duty Free also reported that customers in their 20s and 30s accounted for 75.68% of Chinese visitors during the holidays. Hotel Shilla pinpointed 2013 as the beginning of the K-wave phenomenon and the year in which Chinese customers’ preferences changed significantly. The retailer said that before 2013 luxury leathergoods and luxury watches from well-known international brands were the most popular choice in the South Korean duty free industry and the main customers were in their 40s and 50s. The younger generation showed a similar preference, it said. South Korean brands were seldom listed among the top sellers. After 2013 South Korean brands quickly became popular among Chinese customers and turned out to be the major source of sales, Hotel Shilla said. Cosmetics brands have led the way, with the likes of Sulwhasoo and Whoo showing “outstanding growth and their sales even exceeded sales of traditional luxury powerhouses”. In 2016, several South Korean cosmetics brands are listed in the top 10 sales chart at The Shilla Duty Free. Tapping into the minds of Millennials ‘Xinluo daka’ means ‘Master of The Shilla’ and describes The Shilla Duty Free’s strategy of recruiting powerful Chinese social media key opinion leaders (KOLs) to communicate with Chinese social media users. The ‘Dakas’ create content about the benefits of The Shilla Duty Free, spreading information in Chinese social media. Phase two of Xinluo daka is now active with 100 KOLs currently recruited, the company said. The Shilla Duty Free has also implemented a number of features designed to improve and enhance Millennials’ shopping experience. A mobile app allows customers to purchase with a QR code in downtown stores and features voice recognition functionality. It has also introduced a pick-up lounge ‘smart queue’ at Incheon International Airport and is implementing various payment measures such as Alipay and UnionPay. The company itself is also active on social media, uploading content about travel in South Korea such as introducing popular restaurants and providing education on the Korean language.
Most Chinese customers at Chinese duty free shops are in their 50s 's to 30's according to the latest retail figures, highlighting a shift from the previous reliance on middle-aged Chinese tourists. The rise in younger visitors could be attributed to their increasing attraction to South Korea's pop and drama culture as well as the shopping experiences on offer. Duty Free says the 20-30 age group accounted for 76.5% of Chinese customers at its flagship duty free store in Seoul in 40s , whilst South Korean customers in their 40s and 50s made up just 21.7% of the total.