Chinese arrivals overtake Japanese in South Korean power shift

Chinese arrivals overtake Japanese in South Korean power shift

SOUTH KOREA. Chinese visitors to South Korea surged by +37.8% year-on-year in the first quarter of 2013 to 722,548 while Japanese arrivals slumped by -20.8% to 712,527, according to Korea Tourism Organization figures. 

That gives the Chinese a 28% share of total arrivals, for the first time ever ahead of the Japanese (27.6%) – for decades the country’s overwhelmingly dominant Asian visitor group. 

By comparison, for full year 2007, just over five years ago, the Chinese accounted for just 16.6% of visitors, compared to 34.7% for the Japanese. 

The two nationalities, along with Korean nationals, drive South Korea’s travel retail industry. Departures by Koreans rose +10.5% in the first quarter to 3,724,653. 

Those figures underline the key dynamic that has shaped South Korea’s travel retail industry in recent years. 

Chinese visitors to South Korea rose by +27.8% in 2012 to 2,836,892 (a 25.5% market share), while Japanese arrivals increased by +7.0% to 3,518,792 (31.6%). Departures of Koreans rose by +8.2% in 2012 to 13,736,976. 

The Shilla Duty Free is targeting Chinese shoppers at its flagship Seoul downtown store

The boom in Chinese arrivals and spending is driving travel retail to new heights. As reported, the country’s airport and downtown duty free market grew by +17.8% last year to US$5.3 billion, driven by a surge in Chinese visitors and spending. 

That figure excludes sales by Korean Air of around US$198 million (making it the world’s leading inflight retailer, with fellow Korea carrier Asiana Airlines number two) and ‘offshore duty free’ sales by Jeju Tourism Organization (JTO) and JDC at Jeju Airport. 

We’ll examine the Korean market in extensive detail in a special report in the May issue of The Moodie Report Print Edition.