What: South Korean retailers are launching new promotions and experiential offerings to attract Chinese tourists ahead of visa-free group entry.

Why it is important: The move underscores the uncertainty facing duty-free and department store operators, who must innovate to convert increased tourist arrivals into actual sales.

South Korean retailers are intensifying efforts to attract Chinese tourists as visa-free group entry resumes, introducing a wave of new promotions and expanding product ranges beyond traditional luxury cosmetics to include fashion, lifestyle, and convenience store exclusives. This strategic shift is a response to evolving Chinese consumer preferences, with demand now extending to eyewear, K-fashion, health foods, and lifestyle goods. Leading department stores such as Lotte and Shinsegae are investing in curated boutiques, experiential retail zones, and AI-powered translation services to enhance the shopping experience for international visitors. Convenience chains are also capitalizing on the trend, promoting unique local products and publishing guides tailored to tourist interests. Despite these initiatives, the sector faces significant challenges: travel patterns have shifted toward individual tourism, and rising hotel costs may dampen the appeal of package tours. The real test for Korean retailers will be whether these innovations can translate increased tourist arrivals into meaningful sales, especially as global examples show that higher footfall does not always guarantee a rebound in spending.

IADS Notes: Recent industry developments reinforce the urgency of these strategies. In May 2025, South Korea’s beauty sector pivoted from Chinese dependence to global diversification, while luxury beauty sales outpaced fashion. October 2024 saw Shinsegae launch an AI-powered translation service, reflecting the broader adoption of technology and experiential retail. The competitive rivalry between Lotte and Shinsegae in Myeongdong, highlighted in April 2025, underscores the need for differentiation as department store growth stagnates. Meanwhile, November 2024 data confirm that Chinese tourists now seek immersive, experience-driven retail, and recent trends in Hong Kong and Japan reveal that increased tourist arrivals do not automatically lead to higher spending, emphasizing the need for continued innovation.

Korean retailers rush to woo Chinese tourists ahead of visa-free entry