South Korean eTailers are benefiting from pent-up demand for luxury products as social distancing mandates are relaxed and more consumers return back to engage with the physical world.
For one, South Korean retail giant Shinsegae saw its consolidated Q1 sales soar to $1.9 billion, while its net profit increased to $78.8 million. Demand was particularly high for luxury products and apparel across its chain of department stores. Luxury sales, womenswear, menswear and sportswear showed a year-on-year improvement of 58 percent, 25 percent, 35 percent and 37 percent, respectively.
The company’s subsidiary Shinsegae International, meanwhile, saw a spike of 21 percent in sales of fashion products and 18 percent in sales of beauty products, with shoppers flocking to the eTailer’s site to make purchases they cannot due to ongoing global travel restrictions. It is expected that Shinsegae International’s online platform, SI Village, will see sales grow by more than 90 percent year-on-year in 2021.
That being said, the company’s duty-free business is continuing to suffer — much like the rest of the travel retail industry. Sales at stores located at airports are down by 92 percent year-on-year. However, the company has been able to offset some of those losses through its downtown duty-free sales, which have grown by 35 percent since Q1 2020.