Journalist

Lee Hugh
  • South Koreas LS Eco Energy to expand rare earth metals business in Vietnam
    South Korea's LS Eco Energy to expand rare earth metals business in Vietnam SEOUL, December 17 (AJP) - LS Eco Energy said on Wednesday its board has approved an investment plan to expand its rare earth metals business in Vietnam, as the South Korean firm seeks long-term growth in strategic materials. The investment, valued at about 28.5 billion won ($21 million), will be funded in part through the sale of treasury shares. LS Eco Energy plans to raise approximately 10.7 billion won by selling 297,303 treasury shares to its largest shareholder, LS Cable & System, the company said. The move is aimed at building an integrated value chain spanning raw materials, rare earth oxides, and refined metals. Under the plan, rare earth oxides supplied by global mining companies will be processed into metals at LS Eco Energy’s facilities in Vietnam, with downstream applications including permanent magnets produced through LS Cable & System’s overseas operations. LS Eco Energy said it will install rare earth metal production facilities at its plant in Ho Chi Minh City, enabling the refinement of oxides into metals. The company is currently in talks with several global mining firms on raw material supply and potential joint ventures. Final investment may change depending on equity participation and project progress. Rare earth metals are a key input for permanent magnets used in electric vehicle motors, wind turbines, and robotics. The metallization process is technically complex and is currently commercialized primarily in China, Japan, and the United States. “This investment marks a shift from planning to actual production in the rare earth sector,” Chief Executive Lee Sang-ho said in a press release. “We aim to expand beyond our cable-centered business and position ourselves in strategic materials.” 2025-12-17 10:27:43
  • South Korea considers separate agreement with US for nuclear submarines
    South Korea 'considers separate agreement with US for nuclear submarines' SEOUL, December 17 (AJP) - South Korea is considering a separate agreement with the U.S. for the construction of nuclear submarines, National Security Adviser Wi Sung-lak said on Tuesday. Upon arriving at Dulles International Airport near Washington, D.C., Wi said that such an agreement would be needed, separately from the comprehensive joint fact sheet signed between the two countries last month, which outlines agreements on bilateral trade and security. Wi then added that he is looking into the case of Australia, which was granted an exception for the use of atomic energy through a separate agreement. In late October when U.S. President Donald Trump visited the southeastern city of Gyeongju, Seoul and Washington reached a broader agreement that included a U.S. commitment to support the construction of nuclear submarines using U.S.-supplied fuel, along with the reprocessing of spent nuclear fuel and uranium enrichment. However, to proceed with the construction of nuclear submarines, revisions would be needed to the current bilateral nuclear energy pact, first signed in 1974, which prohibits South Korea from reprocessing spent nuclear fuel and enriching uranium for power generation. During his stay in Washington, D.C., until Thursday, Wi is scheduled to meet with Secretary of State Marco Rubio and Energy Secretary Chris Wright for follow-up talks to implement agreements outlined in the joint fact sheet and related discussions. 2025-12-17 10:19:32
  • INTERVIEW: Koreas weak won reflects structural dollar imbalance, not crisis conditions
    INTERVIEW: Korea's weak won reflects structural dollar imbalance, not crisis conditions South Korea’s won has weakened past 1,470 per dollar, a level that evokes memories of past currency crises. But strong external fundamentals suggest the current situation differs sharply from previous episodes of financial turmoil, according to Jeon Kwang-woo, chairman of the World Economic Research Institute and a former head of the Financial Services Commission (FSC) and the National Pension Service (NPS). Despite record current account surpluses and a stock market rally that has pushed the KOSPI above 4,000 points, the won has remained under pressure for months. Foreign exchange authorities have stepped in through verbal intervention and coordination with the NPS on currency hedging, but the exchange rate has shown little sustained improvement. “The won's weakness is unlikely to reverse quickly,” Jeon said in an interview, attributing the situation primarily to a structural imbalance in dollar supply and demand rather than financial instability. Jeon said demand for dollars has surged as individuals, corporations, and institutional investors increase overseas investments, particularly in the United States following bilateral economic agreements. Bank of Korea data underscore the imbalance. In October, South Korea recorded a current account surplus of $6.81 billion, while overseas investment by South Koreans jumped $17.27 billion — more than two-and-a-half times the surplus. In contrast, foreign investment inflows into South Korea totaled $5.2 billion, less than one-third of the outflow. As a result, the won has weakened steadily for seven months, rising 7.6 percent against the dollar since June to reach around 1,470 in December. Jeon stressed that the current environment bears little resemblance to the 1997 Asian financial crisis or the 2008 global financial crisis. “Back then, instability was systemic,” he said. “Today, the pressure is concentrated in the foreign exchange market. Without resolving the underlying supply-demand structure, policy measures alone cannot change the trend.” Authorities recently extended a $65 billion currency swap arrangement with the National Pension Service as part of stabilization efforts. Still, the won opened at 1,469 per dollar and later weakened to as much as 1,477, highlighting the limits of intervention. While acknowledging the government’s efforts, Jeon said policymakers have limited control over the growing scale of overseas investment, which continues to fuel dollar demand. A “four-party consultative body” comprising the Ministry of Economy and Finance, the Ministry of Health and Welfare, the National Pension Service, and the Bank of Korea has been discussing measures to stabilize the exchange rate. The central bank has suggested strengthening the domestic stock market and encouraging pension funds to allocate more assets at home to curb capital outflows. Jeon, who was the longest-serving chairman in NPS history, strongly criticized efforts to enlist the pension fund as a policy tool. “The National Pension is the people’s asset,” he said. “It should not be mobilized for political or short-term policy objectives.” He argued that while exchange rate stability and a buoyant stock market are legitimate government goals, the overriding mandate of the pension fund must remain maximizing long-term returns for beneficiaries — citing Canada’s pension system as a model of institutional independence. Jeon did not entirely rule out a limited role for the NPS, noting that given the size and strong performance of its overseas portfolio, some dollar inflows could occur naturally as profits are realized. However, he emphasized that any such moves must be based on autonomous investment decisions, not government pressure. For longer-term solutions, Jeon called for structural reforms to raise South Korea’s potential growth rate. In the short term, he suggested temporary tax incentives, expanded currency swap lines by the Bank of Korea, and independently issued foreign-currency bonds by the NPS. He cautioned that short-term measures carry inherent risks. “Every quick fix has two sides,” Jeon said. “If policymakers move too fast, they risk unsettling the market. Preserving trust is ultimately the most important factor.” * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2025-12-17 08:46:39
  • No Other Choice , Golden enter Oscar shortlists for 98th Academy awards
    "No Other Choice" , "Golden" enter Oscar shortlists for 98th Academy awards SEOUL, December 17 (AJP) -South Korea has secured two high-profile spots on the Academy Awards shortlists, with “No Other Choice” advancing in the International Feature Film category and “Golden,” from animated feature K-Pop Demon Hunters, shortlisted for Best Original Song, according to the Academy of Motion Picture Arts and Sciences. No Other Choice — a darkly comic thriller that examines moral compromise and social pressure through an ordinary man pushed to extremes — is among 15 non-English films shortlisted from submissions by 86 countries and regions, marking Korea’s sole entry in the international feature race at this stage. The shortlist features a geographically diverse lineup, including Argentina’s Belén, Brazil’s The Secret Agent, France’s It Was Just an Accident, Germany’s Sound of Falling, India’s Homebound, Iraq’s The President’s Cake, Japan’s Kokuho, Jordan’s All That’s Left of You, Norway’s Sentimental Value, Palestine’s Palestine 36, Spain’s Sirât, Switzerland’s Late Shift, Taiwan’s Left-Handed Girl and Tunisia’s The Voice of Hind Rajab. In the Original Song category, “Golden” advanced as one of 15 shortlisted tracks, selected from 65 eligible submissions. Featured in K-Pop Demon Hunters, the song blends K-pop production with an animated action narrative and has gained strong global traction. It has also earned a Grammy nomination, underscoring its crossover appeal beyond film and into the global music industry. Earlier, No Other Choice earned three Golden Globe nominations, including Best Motion Picture – Musical or Comedy, Best Non-English Language Film and Best Actor for Lee Byung-hun. K-Pop Demon Hunters was also nominated at the Golden Globes for Best Animated Feature, Best Original Song and Box Office Achievement. At the Critics Choice Awards, No Other Choice received nominations for Best Adapted Screenplay and Best Foreign Language Film, while K-Pop Demon Hunters was shortlisted for Best Animated Feature and Best Original Song for “Golden.” Academy members will vote on nominations from Jan. 12 to Jan. 16, 2026, with the final list of nominees to be announced on Jan. 22. The 98th Academy Awards ceremony will take place on March 15, 2026, at the Dolby Theatre in Hollywood and will be broadcast live on ABC. While only five nominees will ultimately be selected in most categories, placement on the shortlist marks a critical milestone — keeping Korean cinema and pop culture firmly in the global awards conversation as the Oscars race enters its decisive phase. 2025-12-17 08:04:21
  • INTERVIEW: Mongolian envoy anticipates S. Koreas cooperation in key sectors including critical minerals and infrastructure
    INTERVIEW: Mongolian envoy anticipates S. Korea's cooperation in key sectors including critical minerals and infrastructure SEOUL, December 16 (AJP) - The Netflix survival entertainment program, "Physical: Asia," recently concluded, became a global hit. Notably, the Mongolian team, competing neck and neck with the Korean team until the final round, demonstrated remarkable strength and resilience truly worthy of the title "Descendants of Genghis Khaan." Their outstanding performance left a deep impression on Korean viewers and strengthened people to people connection between Korea and Mongolia in Northeast Asia, a region characterized by high tensions among major powers. This year marks the 35th anniversary of diplomatic relations between Mongolia and the Republic of Korea. At the time the ties were established, bilateral trade amounted to just 2.7 million USD today it has increased more than 200 folds, surpassing 600 million USD last year to reaching all-time high. Based on the elevation of diplomatic ties to "Strategic partnership" in 2021, the two countries have expanded cooperation across the various fields, including the Ulaanbaatar Metro project, critical minerals and supply chain collaboration, and rice cultivation pilot projects in Mongolia. Ambassador Sukhbold Sukhee, who assumed his duties in June last year, reflected on the 35-year history of Korea-Mongolia relations and shared his vision for the future of bilateral ties. "It is a truly significant moment for me to commemorate the 35th anniversary of our relations," he said, noting, "Our two countries have a long history of close cooperation." Partnership and Success (ODA) The Ambassador expressed his gratitude for Korea's Official Development Assistance (ODA) to Mongolia, delivered mainly through the Korea International Cooperation Agency (KOICA), noting that "several projects have had a very significant impact on Mongolia's economy and infrastructure." He highlighted the gender equality initiative, "Promoting Gender Equality in Public Decision-making and Women's Empowerment in Mongolia," as one of KOICA's most successful projects in the country. He noted that it contributed to the election of 32 female candidates in last year's parliamentary election, accounting for about 23% of the total seats, calling it "a truly meaningful achievement" In the health sector, the Ambassador cited the establishment of the National Diagnostic and Treatment Center, supported by the Economic Development Cooperation Fund (EDCF), as a representative case. He also underscored the "New Water Resource Development" project, which paved a way for new urban development in Yarmag, a rapidly growing district of Ulaanbaatar. "If you visit Mongolia now, once you exit the highway road from the airport, you will enter the Yarmag District and see how much construction has taken place," he explained. Infrastructure and Economic Cooperation The Government of Mongolia has designated this year as the "Year of Supporting Capital Infrastructure Development" and is advancing major infrastructure projects in Ulaanbaatar. Central to this effort is the Ulaanbaatar Subway Line 1 project, whose basic design was completed by a Korean consortium. Leading Korean companies are currently taking part in the bidding for the construction phase, which is scheduled to begin in earnest in 2026. The Ambassador of Mongolia noted this an example of "a sign of further strengthening of bilateral cooperation in infrastructure," adding, "We hope that Korean companies will take part in this open tender, as it is accessible to any qualified international company." Critical Minerals and Supply Chain Cooperation: Amid the global competition for minerals driven by U.S.-China rivalry and the rapid growth of AI, mineral-rich Mongolia is becoming an increasingly important economic partner for South Korea. Following the 2023 MOU on Rare Metal (Rare Earth) Supply Chain Cooperation between the Ministries of Industry, and Mineral Resources between two countries, the joint efforts have been accelerating. The Ambassador noted "After assuming the duties I proposed the Korea-Mongolia Rare Metals Cooperation Joint Committee Meeting in March this year in Seoul, which led to the "Mongolia-Korea Critical Minerals Mining Investment Forum held this past September. Moreover, he emphasized "We can work together by combining Mongolia's mineral resources with Korea's advanced supply chain, especially given Korea's reliance on a limited number of countries for critical minerals." He also highlighted that Mongolia has advanced in developing certain metals such as copper, but rare earth elements have not yet been developed. If the Korean Government shows a strong interest in this sector, the Government of Mongolia is ready to cooperate." People-to-People and Cultural Exchange People-to-people exchange between Mongolia and Korea is also growing rapidly. Nearly 300,000 Mongolians, almost one-tenth of 3.6 million population have spent time in Korea for study, work, tourism and other purposes. The Ambassador noted that he has requested the Government of the Republic of Korea to ease or exempt visa requirements, particularly for Mongolians seeking medical treatment in Korea. He shared that the number of medical visitors "reached about 25,000 last year," adding, "Mongolians are travelling to Korea for medical purposes because they believe the excellence of the Korean medical system, but obtaining a visa still remains difficult." Korean Visitors to Mongolia: The travel to Mongolia is also becoming increasingly popular among Koreans. The vast landscapes, including Terelj National Park, and the spectacular night skies are attracting Korean travelers seeking the new experience abroad. "Last year, around 180,000 visited Mongolia for tourism, making the largest group of foreign tourists", he said. However, he noted that many travelers see only Terelj National Park before departing. "Please do not think that Terelj is all that Mongolia has to offer. Mongolia has vast territory, and we are the world's 17th largest by territory" he emphasized, encouraging visitors to explore more of the country. K-Culture Influence: The K-Culture including K-Pop and K-Food is widely popular in Mongolia, contributing to the growth presence of Korean companies in many sectors such as distribution, electronics, and construction. As a result, 'K-Lifestyle' has become increasingly familiar to Mongolian customers, influencing the everyday life. The Ambassador mentioned that Korean has become the third most popular foreign language in Mongolia, after English and Chinese. He also pointed the inclusion of Kimchi into the traditionally meat-heavy Mongolian diet as clear examples of Korean cultural impact. He said, "Kimchi is now one of the main dishes in our cuisine. Ten or fifteen years ago, it wasn't on our tables, but today every family enjoys it." Security and Diplomacy My country is situated between China and Russia. Mongolia now maintains deepening relations not only its two neighbors but also with western countries, including the United States, Canada, Germany, France, and Australia allowing it to pursue a broad and balanced diplomatic portfolio. Meantime, Mongolia also maintains friendly relations with both DPRK and the Republic of Korea, operating an embassy in Pyongyang, which positions it as a crucial country capable of contributing to stability on the Korean Peninsula. The multilateral diplomacy expert and former Ambassador to the United Nations explained the major pillars of Mongolia's foreign policy as 'Two neighbors' prioritizing the neighboring countries and 'Third neighbors' aimed at diversifying its diplomatic, economic, cultural relationships. The former Ambassador to UN emphasized, "The Republic of Korea is one of Mongolia's most important third neighbors, alongside the U.S., Japan, and the European Union." On the nuclear issue, he noted, "Mongolia declared its territory as a Nuclear Weapons Free Status in 1992. Since then, Mongolia's position has been very clear: we are a party to the Non-proliferation treaty, and remain firmly committed to the principle of non-proliferation on the Korean Peninsula." He also highlighted the "Ulaanbaatar Dialogue," a multilateral diplomatic forum initiated by Mongolia, as an important platform for dialogue among all parties. He noted that the U.S., China, Russia, Japan, and even the DPRK participate in this forum, noting, "Some experts believe Mongolia can serve as a bridge between the DPRK and the Republic of Korea because we maintain good relations with both sides." Emphasizing the importance of diplomacy, he remarked, "Open discussion, open mind, and open cooperation are always the path to peace and security," concluding, "Our position is that isolation is not the solution." In closing the interview, Ambassador Sukhbold reaffirmed that "the Republic of Korea is one of Mongolia's most important third neighbors," emphasizing that the two countries can further deepen cooperation across all areas from the economic fields, including rare earths and infrastructure development to diplomacy, and culture. He expressed his hope that "this relationship will continue for many years and we can work together more closely to implement more significant projects." * This article, published by Aju Business Daily, was translated by AI. 2025-12-17 06:00:00
  • Member-heavy KOSDAQ limps as KOSPI flies on thin venture financing
    Member-heavy KOSDAQ limps as KOSPI flies on thin venture financing SEOUL, December 16 (AJP) - There is a Korean saying that the younger is better than the elder. That adage hardly applies to the KOSDAQ, which has struggled to outperform its bigger sibling, the KOSPI, even with a steady stream of government stimulus measures. The “younger brother” showed a brief revival in the final two months of the year as foreign investors returned. Overseas investors bought a net 128.7 billion won ($93 million) worth of KOSDAQ shares as of last week — a sharp reversal from the 1.4 trillion won in net selling recorded between January and November. Daily turnover averaged more than 1 trillion won, double the level seen in August. Even so, gains remained modest. The KOSDAQ rose 1.8 percent over the period, compared with a 4.3 percent increase in the KOSPI. Last month, the pattern briefly reversed, with the KOSDAQ gaining 1.4 percent while the KOSPI fell 4 percent. Longer-term charts tell a less flattering story. The KOSDAQ has been largely sidelined in Korea’s broader exit-strategy debate tied to the so-called “Korea discount.” As of Monday, the KOSDAQ was up 36.7 percent this year — respectable, but far behind the KOSPI’s 70.5 percent surge. The gap widens further over five years: the KOSDAQ has gained just 9 percent, versus a roughly 50 percent rise for the KOSPI. It is not that authorities have done little. In the latest policy push, the government is reportedly considering separating the KOSDAQ from the Korea Exchange (KRX) to establish it as an independent entity, modeled after the U.S. Nasdaq. Yet despite aggressive support measures, companies continue to leave the market. The KOSDAQ’s deeper problem is its failure to persuade successful firms to stay once they scale up. On Dec. 8, shareholders of Alteogen — the KOSDAQ’s largest biotech by market capitalization — approved a plan to move its listing to the KOSPI. Alteogen’s market value stands at around 25 trillion won, accounting for roughly 5 percent of the KOSDAQ’s total capitalization. It is far from the first high-profile departure. Naver voluntarily delisted from the KOSDAQ to move to the KOSPI in 2008, followed by Kakao in 2017 and Celltrion in 2018. Size matters As of Tuesday, 1,822 companies were listed on the KOSDAQ, nearly double the 958 firms on the KOSPI. Trading volume on the KOSDAQ is roughly three times higher, yet trading value tells a different story: KOSPI transactions totaled 16.3 trillion won, surpassing the KOSDAQ’s 13 trillion won. Park Soon-jae, chief executive of Alteogen, said the move is expected to “increase the stockholding ratio of institutional investors,” noting that both domestic and foreign institutions tend to favor KOSPI-listed firms. Confidence problem The Federation of Korean Industries (FKI) points to the high share of “marginal” or “zombie” companies — firms unable to cover even their interest expenses — as a core weakness. As of 2024, such companies accounted for 23.7 percent of KOSDAQ listings, more than double the roughly 10 percent share on the KOSPI. Still, new listings continue to appear almost daily this month, highlighting the lack of financing alternatives for startups and early-stage companies. A survey released last Friday by the Korea Venture Business Association (KOVA) found that 85 percent of unlisted venture firms planning an IPO hoped to list on the KOSDAQ rather than the KOSPI. Respondents agreed that fundamental structural reform is needed to revitalize the market. Many emphasized prioritizing the “technology special listing” system, under which technological capability and growth potential are the main criteria. While more than a third of KOSDAQ-listed firms already use the system, standards remain ambiguous, with marketability sometimes outweighing technological merit. Market discipline was another recurring theme. About 84 percent of surveyed companies said the KOSDAQ could only be revitalized by expelling insolvent firms, including zombie companies, arguing that financial soundness is as critical as technological strength in restoring investor confidence. “The KOSDAQ can only function as a proper securities market when its identity is clearly defined and its soundness is strengthened,” said Lee Jung-min, secretary-general of KOVA, adding that the government’s “KOSDAQ 1,000” goal would only be achievable with a clear, national-level roadmap. 2025-12-16 17:53:06
  • Korean calligraphy exhibition marks 60 years of immigration to Argentina
    Korean calligraphy exhibition marks 60 years of immigration to Argentina SEOUL, December 16 (AJP) - A Korean calligraphy exhibition marking the 60th anniversary of Korean immigration to Argentina opened on December 12 at the Museo Nacional de Arte Decorativo in Buenos Aires, bringing together Korean community members and Argentine officials to reflect on six decades of shared history. The opening ceremony was attended by Han Byung-gil, chairman of the Korea Council on Latin America & the Caribbean, who delivered congratulatory remarks highlighting the cultural significance of Hangeul and the long-standing contributions of the Korean community in Argentina. The exhibition, titled to commemorate the milestone anniversary, was hosted by North Jeolla Special Self-Governing Province and organized by the World Calligraphy Biennale of Jeonbuk. It was supported by the Korea Council on Latin America & the Caribbean, the Korean Association in Argentina, and the Korean Cultural Center in Argentina. The exhibition runs from December 12 through December 19. Following the opening ceremony, an awards presentation was held at the same venue to recognize distinguished members of the Korean-Argentine community. Ambassador Lee Yong-soo of South Korea to Argentina presented commendations to Kim Hye-sook and Yang Won-joon in recognition of their contributions to the community. The evening continued with a year-end reception for the Korean community in Argentina, which also served as a commemorative gathering marking the 60th anniversary of immigration. The event provided an opportunity to reflect on the community’s history and to reaffirm commitments to its future development. The reception was attended by more than 200 guests, including Kelly Olmos, a member of Argentina’s Chamber of Deputies and former labor minister; Santos Gaston, director of multicultural affairs for the city of Buenos Aires; Alfredo Bascu, former Argentine ambassador to South Korea; and members of the Korean diaspora. Organizers said the event underscored the role of cultural exchange in strengthening ties between Korea and Argentina and highlighted the enduring presence of the Korean community in Argentine society. 2025-12-16 17:51:01
  • 24/7 hotline for transnational crimes available, spy agency says
    24/7 hotline for transnational crimes available, spy agency says SEOUL, December 16 (AJP) - Victims of transnational crimes such as online scams and phishing schemes, as well as those who encounter or are aware of misinformation threatening national security and public safety, can dial 111 to report them, the National Intelligence Service (NIS) said on Tuesday. They also can text to #0111 or leave messages on the NIS' website around the clock. These crimes involve multiple countries or foreign nationals, including voice phishing, overseas employment fraud, online scams, and international drug-related offenses targeting South Koreans. The spy agency urged citizens to immediately report any such incidents, warning that the recent surge in these crimes "poses a threat to national security." * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2025-12-16 17:41:13
  • South Korea deploys new tactical missiles capable of countering North Korean long-range artillery
    South Korea deploys new tactical missiles capable of countering North Korean long-range artillery SEOUL, December 16 (AJP) - South Korea's new tactical surface-to-surface missiles have been deployed and are combat-ready, the Defense Acquisition Program Administration (DAPA) said on Tuesday. The missiles, known as KTSSM, are a crucial part of the country's defense strategy designed to precisely counter North Korean artillery and strike command facilities including underground bunkers in the event of conflict. A ceremony marking the deployment was held at a military command in Wonju, Gangwon Province, with officials from DAPA and the Joint Chiefs of Staff in attendance. Also called "Thunder" or "artillery killer," the homegrown precision-guided missiles are capable of destroying an enemy's long-range artillery positions. DAPA also announced plans to complete the development of an improved version with enhanced range and penetration capabilities by 2027. * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2025-12-16 17:13:20
  • Foreign arrivals hit records, but Koreas duty-free shops face deepest slump in a decade
    Foreign arrivals hit records, but Korea's duty-free shops face deepest slump in a decade SEOUL, December 16 (AJP) - Korea has waived visas for Chinese group tourists, the won is about 4 percent weaker than a year ago, and inbound foreign arrivals are on track to hit a record high in 2025. Yet duty-free sales are shrinking to levels last seen a decade ago. Once the backbone of tourist retail — and a near-mandatory stop for Chinese and Japanese visitors — duty-free shops are shuttering outlets, downsizing operations and renegotiating rents as foot traffic thins. The downturn reflects not a collapse in tourism, but a fundamental shift in who is visiting Korea and how they shop. From January to October, domestic duty-free sales totaled $7.3 billion, down 16.6 percent from a year earlier, according to the Korea Duty Free Shops Association. Even allowing for year-end seasonality, the full-year market is expected to fall to its lowest level since 2015, when sales stood at about $8.1 billion. The slump stands in stark contrast to tourism numbers. Foreign arrivals reached 15.82 million over the same period, up 15 percent year on year. At the current pace, Korea is likely to surpass its pre-pandemic record of 17.5 million visitors set in 2019 and meet the government’s full-year target of 18.5 million. Retailers had hoped the return of Chinese group tours — credited with driving pre-pandemic duty-free sales above $20 billion annually — would provide relief. Chinese tourists are back, but their shopping itineraries have changed. Instead of duty-free counters, visitors are flocking to health-and-beauty chains such as Olive Young, discount retailers like Daiso and fashion platforms including Musinsa. These outlets offer lower prices, faster transactions and products perceived as more closely tied to Korean lifestyle trends. "Visitors are buying more items, but spending less per product," said a Korea Tourism Organization (KTO) official, noting that budget-friendly shopping is crowding out luxury spending. KTO data released Tuesday underscore how sharply consumption patterns have shifted. Compared with 2019, average spending per purchase by foreign visitors fell from 150,000 won ($102) to 120,000 won in 2025. At the same time, average spending per visitor rose 83 percent year on year, while the number of purchases surged 124 percent — pointing to more frequent transactions across a wider range of lower- to mid-priced goods. Foreign card payment data show particularly strong growth in capsule-toy "gacha" shops, where transactions jumped 142 percent from January to September. Spending also rose sharply at stationery stores (up 48.7 percent) and bookstores (up 39.9 percent). Cosmetics, daily necessities, character goods and small lifestyle items are emerging as key growth categories. As profitability deteriorates, even conglomerate-run operators are retreating. Hotel Shilla and Shinsegae Duty Free have both returned their Incheon International Airport concessions early, opting to absorb termination penalties of more than 190 billion won each rather than continue operating at a loss. City-based stores are also scaling back. Lotte Duty Free downsized its flagship store at Seoul's Lotte World Tower, while Hyundai Duty Free closed its Dongdaemun branch and reduced the size of its COEX location. Korea's five major duty-free operators recorded combined losses exceeding 300 billion won last year — a stark reversal for an industry once seen as a bellwether of the country's tourism boom. 2025-12-16 17:05:53