Lotte Duty Free posted positive earnings last year at its outlet in Da Nang International Airport, which opened in May 2017, the company said on Jan. 8, while declining to disclose the exact figures.
The airport outlet is Lotte’s first duty-free store in Vietnam. After starting partial operations in May, the company started full operations in November.
According to industry sources, it is unusual for a duty-free operator to be profitable in its first year of operations, mainly due to high initial setup costs. Lotte, however, could post positive earnings by researching and analyzing the Vietnamese market thoroughly for two years before entering. According to the company, Lotte Duty Free CEO Jang Sun-wook visited Vietnam every six months to check the progress before the launch.
The firm also formed a firm partnership with a local partner that established its joint venture Phu Khanh Duty Free. “We aim to become the top duty-free operator by 2020 through aggressively expanding into overseas markets,” Jang said in a statement.
Lotte plans to expand its overseas presence this year, especially in Vietnam. It is slated to open an airport outlet in Nha Trang, Vietnam, during the first half of this year, with aims to exceed 700 billion won (US$644 million) in sales over the next 10 years. Lotte also said it plans to open outlets in central Da Nang, Hanoi and Ho Chi Minh.
Lotte Duty Free currently runs six stores outside Korea, including in Vietnam, Japan, US and Indonesia.
By Song Seung-hyun (firstname.lastname@example.org