Tourists shop at a clothing store in Seoul.

A Chinese couple in their 30s walked into a branch of the Hyundai Department Store in Gangnam, Seoul on May 5 and bought two Hermes bags for W110 million (US$1=W1,085). Another Chinese tourist last week bought a W100 million Piaget diamond watch, the most expensive item sold at the Walkerhill Duty Free Shop in Seoul so far this year.

Japanese and American tourists have shopped in Korea for many years, but Chinese are proving to be the biggest spenders as visitor numbers from the world's most populous nation surge.

◆ Big Spenders

The number of Chinese visitors to Korea rose 2.5 times from 710,000 in 2005 to 1.87 million last year. According to the Korea Tourism Organization, Chinese tourists spend US$1,558 on average, 1.5 times as much as Japanese ($1,072) and substantially more than U.S. visitors' $1,292.

At the Lotte Duty Free Shop, sales to Chinese customers accounted for a mere 6 percent of the total in 2007, but that surged almost five-fold to 26 percent this year. According to Lotte, Japanese tourists tend to plan their purchases, which usually include dried seaweed, low to mid-priced cosmetics and some prettily designed gifts. By comparison, Chinese visitors are more likely to buy goods on impulse.

The Chinese economy has prospered since the 2008 Beijing Olympics and demand for overseas travel soared. "Before 2008, Chinese customers generally bought small home appliances and clothes, but now sales of luxury-brand bags, watches, and accessories are on the increase," a Hyundai Department Store staffer said.

◆ Incentive Tours

This year tourist numbers are shrinking due to factors including the earthquake and tsunami in Japan, a spokesperson with travel agency Mode Tour said, but the amounts foreign visitors spend on shopping or cosmetic surgery are growing sharply.

Some industry insiders attribute the trend to the fact that an increasing number of Chinese firms have adopted "incentive tours" to reward employees or boost their morale. "Incentive tours grew more than two-fold compared to previous years," A Huabang Tour staffer said. "As those on the tour are mostly senior staff at their companies, they spend quite a lot of money in duty free shops here."