Lotte Duty Free is estimated to have posted a net profit of 500 million won (US$463,649.85) in Vietnam last year, the first at its overseas outlets, according to news reports on Feb. 14.
Lotte, which currently operates six overseas outlets, entered Vietnam in May last year, opening its first outlet at Da Nang International Airport with a joint venture called Phu Khanh Duty Free. The company owns a 60 percent stake in the local operations.
It is unusual for a duty-free shop to be profitable in the first year considering the high initial setup costs. Reports said the firm could reduce the costs through thorough market research that took two years before entering.
Its crosstown rival Shilla Duty Free has also entered markets like China and Hong Kong but has not yet been profitable.
Lotte will open a new airport outlet in Nha Trang, a resort island in Vietnam, by the first half of this year, targeting more than 700 billion won sales over the next 10 years. The firm also plans to open more city outlets in Da Nang, Hanoi and Ho Chi Minh.
By Song Seung-hyun (firstname.lastname@example.org)