K-Distribution: A Shopping Paradise Revived by Foreign Tourists
Hello everyone! Have you visited Myeongdong or Gangnam lately? I was surprised to see so many foreign tourists! It turns out there's a reason for this! In January, the foreign sales of the three major department stores skyrocketed by a staggering 90% compared to last year! While everyone was worried about the sluggish domestic economy, our retail stocks were making a dazzling comeback thanks to the big-spending foreign tourists. With the government's low PBR value-up policy expectations adding to the mix, the atmosphere for retail and cosmetics stocks is extraordinary. Let's dive into the key points together!
1. In January, foreign sales at the three major department stores surged by 90%... Shinsegae recorded the highest ever!
As foreign tourists continue to flock to Korea, the foreign sales of major domestic department stores have truly exploded! Notably, Shinsegae's main store achieved the highest proportion of foreign sales ever. With the revival of key shopping districts like Myeongdong and Gangnam post-pandemic, big-spending travelers are sweeping up luxury goods and K-fashion items. Recent trends show that the foreign sales are effectively filling the gap caused by domestic sluggishness, instilling confidence in performance. This is no longer just an expectation, but a clear proof of numbers, marking the beginning of a splendid rebound for undervalued retail stocks that have long been overlooked!
2. “Korean department stores are trendy!” Lotte, Shinsegae, and Hyundai Department Store's three-pronged strategy to attract foreign customers.
With the Lunar New Year approaching, Lotte, Shinsegae, and Hyundai Department Store are fully committed to attracting foreign VIPs. From exclusive lounge services to payment benefits via Alipay and WeChat Pay, and K-culture pop-up stores, they are employing various marketing strategies to entice foreign wallets. Notably, MZ generation foreign tourists are excited about Korea's trendy K-fashion brands. The latest trend indicates that the expansion of foreign sales directly correlates with improved profitability for retailers.
3. K-Shopping catches international attention! “Seoul is now the shopping hub of Asia.”
As K-pop gains popularity, analyses from foreign media indicate that shopping demand across Asia is concentrating in Seoul. Not only are global luxury brands thriving, but high-margin Korean designer brands and indie beauty brands are also significantly contributing to department store sales. Foreign investors are starting to take notice of these clear signals of performance turnaround and are adding domestic stocks to their shopping carts.
4. The splendid revival of K-Beauty! Online and offline growth.
Overseas media, including CNBC, have noted that innovative and trendy K-beauty brands are leading the global 'fast beauty' market. With online exports hitting record highs, tourists visiting Korea are also experiencing a surge in offline sales as they try and buy products in department stores and Olive Young. This virtuous cycle between online and offline sales is expected to continue fueling the growth of cosmetic ODM/OEM companies with solid technology.
Overall Insight: A fantastic collaboration of performance and policy!
This issue is not just a fleeting theme; it marks the beginning of structural change! The clear turnaround in performance is evident as foreign tourists fill the gap left by sluggish domestic consumption, fundamentally improving the profit capacity of retailers.
Investment Strategy: Focus on leading department stores with high foreign sales proportions and strength in luxury/fashion (Shinsegae, Hyundai Department Store), as well as H&B store-related stocks benefiting from tourist traffic, and targeting global successful color and indie beauty brands during dips.
Source :https://blog.naver.com/ballostark/224182327623
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