Amorepacific puts limits on duty free purchases due to increasing cross-boarder traders

Amorepacific puts limits on duty free purchases due to increasing cross-boarder traders

By Moodie Davitt Report, Sept. 06, 2017

Leading beauty firm Amorepacific today announced a new duty free sales policy to limit the number of items that customers can purchase in a bid to protect its brands from Chinese shuttle or ‘daigou’ traders.

The story was first reported by The Korea Herald and since confirmed by The Moodie Davitt Report.

This informal but growing cross-border business involves traders who purchases large quantities of Korean products and sell them at lower prices back in China.

As we noted in our e-Zine of 13 July 2017 ‘daigou’ trade represents an increasing proportion of duty free retailers’ beauty sales in Korea, one they are becoming especially reliant upon amid the ongoing THAAD crisis.

Under the new rules, brands such as Laneige can only be sold in limited volumes of five units, in both online and offline channels.

“We have tightened rules as the number of Chinese shuttle traders has surged recently,” an Amorepacific spokesperson told The Investor column at The Korea Herald.

Under the new policy, customers are allowed to buy up to five items from each brand such as Sulwhasoo, Laneige and Hera in duty free.

Previously, the allowable limit was ten items. Online purchase is also restricted to up to five items per person, from 20 before.

The new policy was introduced on 1 September 2017 in offline stores and from 4 September in the online channel, confirmed one of Korea’s leading duty free retailers.

Korean cosmetics companies have seen their sales suffer amid the THAAD-related diplomatic tension between Korea and China, with Chinese visitors and spending falling sharply since March this year.

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