Sales to foreign customers at Korean department stores doubled this year compared with last year. Analysts say department stores have emerged as a key stage for K-culture consumption, as inbound foreign tourists have expanded into high-end spending.
According to the retail industry Wednesday, Lotte Department Store's sales to foreigners in the first quarter rose 100% from a year earlier — exactly double. The pace has steepened markedly compared with the 40% growth rate during the same period last year. Shinsegae Department Store also saw sales to foreigners climb 80% over the same period, with foreigners accounting for nearly 30% of total sales at some stores. The Hyundai Seoul, which has established itself as a landmark in western Seoul, likewise continued its growth trajectory with a 121% increase in sales to foreigners.
The rise in sales to foreigners is not confined to specific products but is spreading across all categories. In particular, high-end consumption centered on luxury goods surged, driving overall performance. In the case of Shinsegae Department Store, luxury goods sales soared more than 150% year-on-year as of last year. Cosmetics (153.0%) and men's fashion (111.7%) also posted triple-digit growth. Luxury watches (85.6%) and women's fashion (67.9%) showed solid gains as well, reflecting a broad expansion in high-end fashion consumption.
Noteworthy is the strong advance in the food and beverage (F&B) segment. Ready-to-eat products surged 228.7% and desserts and cafes jumped 329.2%, indicating that stay-oriented consumption is rapidly increasing. This shows that foreign tourists are shifting toward a "complex consumption" pattern, simultaneously consuming dining, rest, and experiences beyond simple shopping.
What stands out is that the rise in consumption far outpaces the increase in the number of tourists. The number of inbound foreign tourists in the first quarter this year reached 4.76 million, up 23% from a year earlier, but the growth rate of department store sales to foreigners far exceeded this. The industry points to department stores' evolution into K-culture experience spaces beyond shopping as a major factor behind the rise in sales to foreigners.
"For tourists with limited travel time, department stores are recognized as a 'comprehensive set' where they can experience K-culture, including K-food and K-beauty, in one place, beyond simply being a space for shopping," a department store industry official said. "On top of this, premium marketing and specialized services targeting global VIP customers also served as a major factor behind the popularity."
However, some say the outlook ahead is difficult to view with pure optimism. Airfare prices have risen sharply amid the recent surge in international oil prices and higher fuel surcharges, increasing the burden of travel costs. The industry believes that if this trend leads to a slowdown in inbound foreign tourists from the second quarter onward, it could also affect department store sales. In particular, the possibility that higher airfares could reduce the spending power available for use locally is cited as a burden factor.
