South Korea's Lotte Duty Free Co. is slated to open a downtown store in Sydney on May 5, after Australia reopened its international borders to foreign visitors after nearly two years.
The world's No. 2 duty-free operator said on Tuesday that the new store will be the first addition to its network since it launched a store in Singapore Changi Airport in June 2020.
The new downtown store is expected to post over 1 trillion won ($800 million) in sales over the next 10 years, in a country where the duty-free market was worth around 1 trillion won annually before the onset of the COVID-19 pandemic.
As Australia lifted some of the world's strictest travel bans in February of this year, airlines have been
increasing flights bound for the country to pre-pandemic levels, fanning expectations of a rebound in its duty-free market.
In the past month, the number of air passenger arrivals and departures in Australia was about 10 times more than the year-earlier level, according to the Australian Bureau of Statistics.
The number of international flights that arrived at Sydney Airport has recently quadrupled to 40 airplanes a day on average from 10 a day in September 2021.
"The opening of this downtown store in Sydney reflects Lotte Duty Free's determination to speed up its expansion once again," Lotte Duty Free CEO Lee Kap said in a statement.
"We will preemptively respond to the surge in tourism demand by quickly occupying major tourist destinations overseas."
This year, Lotte plans to open new stores in Danang and Hanoi in Vietnam as well.
Currently, it operates 11 shops in the US, Guam, Japan, Singapore, Vietnam, Australia and New Zealand. Now its overseas expansion pivots on Asia and Australia, mainly targeting Chinese travelers, the world's largest spending group at duty-free shops.
In downtown Sydney, the three-level store measuring 3,000 square meters hosts about 150 brands in various categories ranging from cosmetics, perfumes and alcohol to watches and jewelry.
Among them, cosmetics will be sold 15% cheaper than retail prices in Australia on average. Watches will also be offered at competitive prices.
For alcoholic beverages, it will run specialized sections for local wine and spirits favored by Australians, rather than pursuing competitive pricing. Australia sets higher duty-free liquor purchase limits for travelers than other countries.
Once Australia's duty-free market recovers to a certain level, Lotte will open boutique shops for superluxury fashion and jewelry brands inside the downtown Sydney store to attract luxury shoppers.
Write to Mikyoung Lee at
capital@hankyung.comYeonhee Kim edited this article.
