Seoul: Hyundai DF Co., South Korea's fourth-largest duty-free shop operator, announced on Tuesday its plans to streamline its duty-free business operations in response to a significant drop in Chinese tourists and evolving consumer trends.
According to Yonhap News Agency, Hyundai DF currently operates three duty-free stores in South Korea, including two in Seoul and one at Incheon International Airport, located just west of the capital. As part of its reorganization strategy, the company has decided to close the Dongdaemun duty-free shop by July and gradually reduce operations at the Trade Center duty-free outlet in Seoul. The focus will shift towards optimizing the operations at the Trade Center shop and the Incheon International Airport outlet.
In light of the ongoing challenges in the duty-free industry, Hyundai DF intends to relocate some employees and implement a voluntary retirement program to manage its workforce effectively. The broader duty-free sector in South Korea, which includes major players like Lotte Group, Shinsegae Group, and Hotel Shilla Co., has faced declining sales due to factors such as a weak won, a decrease in Chinese visitors, and increased costs at Incheon airport.
Consumer spending on luxury goods has also diminished amid a prolonged economic downturn and elevated consumer prices. Hyundai DF, a wholly owned subsidiary of Hyundai Department Store, has reported consecutive net losses over the past two years. In 2024, the company recorded a net loss of 753.55 million won (approximately US$510,000), a significant improvement from the 39.78 billion won loss reported in the previous year.