South Korea’s No.1 duty-free store operator Lotte Duty Free has added a new city travel shop in Sidney, Australia, its first overseas duty-free shop in nearly two years, in hopes of a travel boom in the post-pandemic era when many countries across the world are reopening their borders.

According to the Korean travel retailer on Tuesday, it will open a three-story tax-exemption outlet with more than 150 brands, including perfumes, alcoholic beverages, and jewelry, in downtown Sidney. This would be its first overseas duty-free operation since the opening of its travel shop at Changhi Airport in Singapore in June 2020.

Lotte became the first Korean duty-free retailer to enter the Oceanian market in 2019 after acquiring five duty-free operations in Australia and New Zealand from JR/ Duty Free in August 2018. With the new opening in Sidney, Lotte holds four shops including the Brisbane Airport branch and Melbourne downtown branch, in Australia and one at the Wellington Airport in New Zealand.

The retailer decided to open its new shop in downtown Sidney in anticipation for inflows of Chinese tourists. According to a survey by China’s largest online travel agency Ctrip in 2019, Australia was Chinese people’s No.1 pick for long-distance travel during the New Year holidays. In addition, the Chinese population residing in Australia is high with 120,000 or 5 percent of the country’s total population and 500,000 in Sidney alone.

After maintaining one of the strictest Covid restrictions in the past two year, Australia in February finally opened its border and is actively expanding international air routes. “We expect a sales increase given a rise in Chinese tourists and the high Chinese population in Sidney,” said an official from Lotte Duty Free.

The duty-free market in Australia amounted to 1 trillion won ($793.7 million) before the pandemic, smaller than the Korean market with 24 trillion won in sales. However, many multinational players, including Dufry, Heinemann, and DFS, compete to raise their shares in the country because it is considered a western nation.

Lotte plans to win over its rivals in the market with price competitiveness. Its cosmetic goods will be priced 15 percent lower than in local retail shops.

By Hong Sung-yong and Jenny Lee

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]