The shopping patterns of Chinese and Japanese tourists in Korea are changing, with a growing number shopping frugally and checking for bargains even in the glitzy shops of Myeong-dong.
Chinese tourists, who were big spenders in Korea not so long ago, can now be seen sorting through piles of products in department stores' discount sections.
The Korea Tourism Organization estimates that more than 150,000 tourists visited Korea during the Chinese Labor Day holidays (April 29 to May 1) and Japan's Golden Week (April 28 to May 6). That is an increase of over 30 percent increase compared to the same period last year.
Korean businesses duly began to prepare for the holidays in April, but the rise in sales did not match initial expectations, according to industry sources.
Shinsegae Department Store said foreign tourists accounted for only 5 percent of sales during the Golden Week period, around half the level of 9 percent during the Chinese New Year in January.
"The number of tourists increased, but we're no longer seeing them buy whatever they can get their hands on," said a Hyundai Department Store staffer. "What's different from last year is that tourists are looking for products that come with freebies and using discount coupons."
The shopping patterns of Chinese tourists have changed markedly. Popular advice being shared among them is to make sure to get freebies in department stores, apply for gift coupons and get as many samples as possible when shopping for cosmetics.
"Chinese tourists are no longer the big spenders they used to be," said a Lotte Department Store staffer. "Now they want to know first whether a product is cheaper in Korea or in China." The trend is to look only for products that are cheaper than elsewhere.
Stores selling mid to low-priced cosmetics are bustling with tourists. The Face Shop chain run by LG Household and Health Care saw sales increase 140 percent year-on-year during the final days of the Golden Week holiday between Friday and Monday. "Most tourists are buying discounted cosmetics at brand stores rather than expensive ones in department stores," a Face Shop staffer said.
Businesses are changing their marketing strategies apace. Lotte Department Store's exclusive Avenuel store, which sells luxury fashions, set up a huge billboard in English, Chinese and Japanese letting tourists know that they can get discounts and VAT refunds for products purchased during the Golden Week holiday. It focused on savings instead of playing up its luxury image.
Another new trend is an increase in the number of tourists using discount coupons and shopping in big supermarkets. At Lotte Mart in Seoul Station, 10 percent of the customers are tourists, and 620 transactions were made by tourists using discount coupons during the Golden Week holiday, a 6.2-fold increase from the same period last year.