Lotte Duty Free, Korea’s largest duty-free operator, Sunday vowed to become the world’s leading duty-free store operator in terms of sales by 2020 by merging with foreign duty-free operators.
“Lotte Duty Free rose to become the world’s second to third-largest global company through consistent investment for the past 36 years. … We will continue our efforts to become the world’s No. 1 with accumulated experience and know-how,” Lotte Duty Free CEO Jang Sun-wook was quoted as saying by Yonhap News Agency.
He also said he will consider mergers and acquisitions.
Lotte has reportedly contacted a duty-free operator in Australia, but the plan has been shelved due to a prosecutorial probe and other politically sensitive incidents this year.
Lotte regained a duty-free store license in Seoul earlier this month while Lotte Group is reportedly moving again to list Hotel Lotte on the stock market, upon which it will use a portion of the funds made from the listing for M&As involving the duty-free business.
Jang added that the company plans to open a duty-free store in Bangkok, Japan and other cities overseas from next year.
According to a report by the Moodie Davitt Report, a specialist information service for the duty free and travel retail industries, Lotte Duty Free recorded 3.7 billion euros ($3.86 billion) in sales, ranking No. 3 on a global scale and trailing behind US-based DFS Group at second place.
Its latest duty-free branch will open at Lotte World Tower in southern Seoul. Lotte Duty Free aims to attract some 17 million foreign tourists and record over 8 trillion won ($6.7 billion) in sales over the next five years at its Lotte World Tower branch.
According to the conglomerate, it plans to invest some 2.3 trillion won over the next five years, with expectations of creating added value of some 7 trillion won.
South Korea’s biggest duty-free store by size at Lotte World Tower will cover some 11,411 square meters, and the group plans to further expand the store to encompass 17,334 square meters.
Meanwhile, Lotte Group Chairman Shin Dong-bin has been stepping up his push for the conglomerate to prepare for the fourth industrial revolution centered on artificial intelligence and virtual reality.
Shin recently ordered the establishment of a department for each industry to be in charge of gathering information and preparing innovative measures to deal with changes, Lotte Group affiliates said.
Lotte Group Policy Coordination President Hwang Gak-gyu recently met with CEOs of affiliates in the retail and food sectors, and will hold meetings with CEOs in other sectors to reiterate the chairman’s instructions.
Lotte Group is working together with global firm IBM to develop various information technology-based services to help shoppers, such as the smart shopping adviser Chatbot.
The company is also using IBM’s cloud-based cognitive computing technology Watson solution to help the group analyze customer data.
By Kim Bo-gyung (firstname.lastname@example.org)