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Lotte's 125% jump in foreign shopper sales brings back the department store celebrity model
Lotte Department Store hired Jennie, its first star model in about a decade, as first-half foreign shopper sales rose about 125% to 640 billion won. The chain is betting tourist spending now outweighs the tenant-brand risk that pushed the industry off celebrity faces.
The Investor · Invest desk
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What happened
- The campaign opens at Incheon International Airport and Seoul Station and later moves to the four stores Lotte operates in Vietnam and Indonesia.
- Lotte effectively stopped using well-known entertainers as the face of its stores after actress Shin Min-a in 2017.
- Korean department stores dropped star models to push their own premium image to the VIP customers who make up a large share of sales.
- Hyundai Department Store used no famous actor as its main model from its 1985 Apgujeong opening until it signed Tilda Swinton in 2016.
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Why it matters
- exposure A reputational problem with Jennie would now hit Lotte's tenant brands as well as the store itself, a risk the chain had not carried since 2017.
- constraint Repeating a 125% gain would take about 1.44 trillion won of foreign sales in next year's first half, a much higher bar for judging whether the campaign paid off.
- precedent If Lotte's tourist sales keep rising with Jennie, Shinsegae and Hyundai, which both ran star models in the past, have a tested case for signing a global name aimed at foreign shoppers.
A rise of about 125% to 640 billion won puts Lotte Department Store's first-half sales to foreign shoppers a year earlier at roughly 284 billion won [5][15]. The chain added about 356 billion won of tourist business in twelve months [16]. Seoul Economic Daily, citing retail industry sources, ties the Jennie campaign that began this month directly to that rise in foreign customers [1][14].
The rollout begins where tourists arrive. The airport and the main rail station put the ads in front of visitors before they reach any store, and the next stop is Lotte's own shops in Vietnam and Indonesia [3]. According to the report, the company wants the Lotte Department Store name itself known to consumers abroad as well as at home, now that foreign tourists are a core customer group in Myeongdong and Jamsil [6]. Both venues are a step removed from the shop floors where VIP customers, a large share of department store sales, do their buying [8].
The reasons the industry dropped star models still apply. A department store hosts fashion, luxury, beauty and food brands, each with its own identity, and a model's reputational trouble can reach those tenants as well as the store [9][10]. An industry official quoted in the report said a model has to lift the value of the store and its tenant brands alike, and that finding one has not been easy [13].
The decision can be read three ways. If tourist spending is now Lotte's main growth line, one global face at the airport goes straight after the segment that added about 356 billion won in a year [16]. If the real target is the four overseas stores, this is a Southeast Asian brand campaign that happens to start in Korea [3]. Or, the more cautious version, Lotte wanted a tourist-facing test it could end without touching the premium image its VIP customers buy into [8].
I'd take the narrower claim. Lotte judged its foreign shopper growth large enough to justify its first star model in about a decade, and with it the tenant risk the industry spent years avoiding [2][14][10]. The larger claim, that tourists are now the main growth lever for Korean department stores, holds only if foreign shoppers supplied most of the chain's total sales growth. The report covers one chain and does not include its total or VIP sales [8]. The industry official made the broader case. With foreign tourists increasing rapidly and department stores turning into places where shoppers go for fashion, culture and lifestyle, the official said, the argument for marketing built around globally influential stars is getting stronger again [11].
What to watch
- Lotte's second-half foreign shopper sales, and whether the chain reports them next to total sales so the tourist share of revenue can be measured.
- Whether the Jennie campaign moves beyond the airport, Seoul Station and the Vietnam and Indonesia stores into Lotte's domestic store advertising aimed at VIP customers.