CJ Olive Young Achieves 1 Trillion Won in Foreign Sales Amid K-Tourism Growth

This year, CJ Olive Young has experienced significant growth as it welcomed tourists from 192 countries, achieving its target of 1 trillion won in foreign sales three months ahead of last year’s timeline, moving the date from November of the previous year to August this year.

As of August, the cumulative foreign purchases at CJ Olive Young's offline stores surpassed 1 trillion won, with approximately 11.01 million transactions recorded between January and August. This figure indicates a foreign purchase occurring roughly every 0.9 seconds within the stores.

According to the purchase tax refund data from Global Tax Free (GTF), foreign customers’ nationalities have expanded significantly. The share of foreign customers in total offline sales increased dramatically from 2% in 2022 to 33% as of August this year.

The top five countries for foreign purchases at CJ Olive Young this year (in alphabetical order) are the United States, Singapore, Japan, China, and Thailand. On average, foreign customers purchase six products, with 35% spending over 100,000 won per transaction. The most popular products include basic skincare, color cosmetics, and hair care.

Notably, foreign sales in non-metropolitan areas have seen a remarkable increase. From January to August this year, foreign sales rose by 47% compared to the previous year, with certain areas like Gangwon experiencing a 105% growth in foreign sales. Regions traditionally catered to domestic tourists, such as Gyeongju, Daejeon, and Jeonju, have also seen significant increases.

The company’s strategic expansion of large 'town' stores, averaging over 200 pyeong, and uniquely branded stores reflecting local characteristics has contributed to this growth. Additionally, foreign tourists are diversifying their shopping experiences by conducting 'stamp tours' across various store locations, rather than finishing all purchases at a single shop. A survey conducted by CJ Olive Young in May revealed that each foreign customer visited an average of 2.8 stores.

CJ Olive Young views its offline outlets as showcases for competitive K-beauty and K-wellness brands, analyzing metrics like foreign customer numbers and sales contributions. The company has designated high-traffic areas as 'Olive Young Global Tourism Zones,' where multilingual staff and signage enhance the shopping experience for foreign tourists. As of August, there are 151 stores across the country classified under this category, making up over 10% of total stores.

Smaller and indie brands that display their products at CJ Olive Young are reaching consumers in over 190 countries. While former buying patterns were focused on finding popular products by word-of-mouth in respective countries, interest has shifted toward discovering a broader range of curated products.

Moving forward, CJ Olive Young plans to continue developing stores in non-metropolitan areas that maximize unique attractions and differentiated experiences. This strategy aims to establish K-beauty landmarks outside of Seoul, providing diverse shopping experiences as tourists travel across the country.

In key cities such as Busan and Jeju, the company plans to expand large renovations and area-specific stores in line with increasing tourist demand. This approach seeks to enhance regional commerce and invigorate the non-metropolitan tourism industry.

Additionally, improvements to shopping convenience for foreign tourists will continue. The 'AI Shopping Assistant' service, launched in select stores in Seoul last June, currently supports eight languages. CJ Olive Young aims to analyze foreign customer composition and purchasing characteristics by the end of the year to optimize shopping experiences by tailoring operations based on nationality, age group, preferences, and travel purposes.

According to a CJ Olive Young representative, the company aims to strengthen its role as a 'K-tourism infrastructure' by utilizing large stores and uniquely themed stores across both metropolitan and non-metropolitan areas, especially in conjunction with the anticipated influx of 20 million inbound tourists. The company seeks to promote K-beauty and K-wellness to foreign tourists domestically while fostering emerging brands within the U.S. market.

In the K-dermo skincare category, foreign sales surged by approximately 78% this year compared to the same period last year, highlighting ongoing interest and demand for effective skincare solutions. CJ Olive Young has begun fostering an 'Advanced Derma' range in collaboration with six major domestic pharmaceutical companies to enhance product offerings.

Functional hair care has also emerged as a new trend among foreign tourists, with a foreign sales share in the overall hair care category reaching around 18%, and specific products like scalp tonics and ampoules achieving higher than average shares at 28%. Wellness trends continue to thrive, with the inner beauty category witnessing a 64% year-on-year increase in foreign sales, with products like olive lemon shots and collagen being particularly popular.

The hand care category, viewed as ideal for souvenirs, has become a staple shopping item for foreign tourists, constituting 40% of total sales. Brands like Beyond and W.DRESSROOM are notable contributors to this category.

In conclusion, the increasing focus on functional products aims to address specific skin concerns and reflects the expanding reach of K-beauty beyond skincare into hair care and wellness categories.