Korean retailers chase Chinese Golden Week shoppers with discounts of up to 30%

Korea's lead is a little over three times Japan's share ^[1], and it measures stated plans. The Seoul Economic Daily's account of the Dragon Trail report says Korea was cited by 20.1% of respondents among travellers planning overseas trips ^[2]. That wording supports two readings: a share of the whole sample, or a share of the outbound group alone. On the second reading, Korea's share of everyone surveyed is about 10.9% ^[3]. Outbound intent itself rose 19 points, a relative increase of 54% ^[2], and the paper reports that Chinese arrivals this holiday are expected to beat last year's ^[15].

The best sales evidence comes from one department store group. Chinese visitors are the largest spenders among foreign tourists in Korea ^[3], and in last year's holiday week Shinsegae's Chinese sales grew about 5.3 times as fast as its sales to all foreign customers ^[4]. The comparison covers one week against the week before, at one company ^[6].

Each offer hands part of the sale back to the shopper. Lotte Department Store gives UnionPay QR payers 10% in rewards plus a further 10% discount on a first-come, first-served basis ^[8]. Shinsegae's offer on MAC, Bobbi Brown and Aveda takes 20,000 won off 100,000 won, which is 20% at the threshold ^[10][6]. Hyundai offers 10% in rewards with UnionPay and other payment partners alongside its fashion coupons ^[12]. Lotte Duty Free's 50-yuan coupon on 1,200 yuan of WeChat Pay spending works out to about 4.2% at the threshold ^[9][7]. Shinsegae is running its festa with the Korea Tourism Organization and payment and tax refund companies ^[10], so some of the cost may sit with partners. "Beyond brand promotions available only at Shinsegae, we have brought together payment benefits and gift certificate rewards to raise shopping satisfaction for foreign customers," said Lee Sung-hwan, an executive in charge of sales strategy at Shinsegae department stores ^[11].

If intent converts into trips, department stores are the likeliest winners, going by Shinsegae's pattern last year ^[4]. Visitors could also come and spend more at convenience counters, where GS25 has stocked its airport stores with more than double the usual quantity of banana-flavoured milk and Greek yogurt ^[14]. The report includes no duty-free sales figure, so the duty-free case rests on survey intent alone. I think the department-store lift happens and the duty-free lift is unproven. The counter-case is that duty-free carries the lightest discount in the set ^[7]. An operator that does get the traffic keeps more of each sale than a department store giving back 20% on beauty ^[6]. The view is wrong if Shinsegae's Chinese sales this holiday week grow no faster than its sales to foreign customers overall ^[6].