Jeju as Korea's new shopping mecca: Shinsegae's task ahead

Unlike Hawaii and Las Vegas, there is one thing missing on Jeju Island, South Korea's top tourist destination: premium outlets.

The island hosted 15 million visitors a year as of 2019, but for luxury shoppers, it offered only the duty-free shops at Jeju International Airport.

Shinsegae Group, South Korea's retail giant, is rolling up its sleeves to transform the barren marketplace into a shopping mecca to meet demand left unsatisfied by local merchants. Last month, it opened a resort-style premium shopping mall on the southern island.

Its fifth premium outlet store, Jeju Shinhwa World, was launched in partnership with Simon Property Group of the US. The shopping center, measuring 8,835 square meters, is located on two floors in the country's largest resort complex in Seogwipo-si, the most-visited place on the island. 

The shopping mall is about one-sixth as big as Shinsegae Simon Yeoju Premium Outlets in Gyeonggi Province, the first partnership outlet between Shinsegae and Simon Group, the operator of Simon Premium Outlets, launched in 2007.

Its location sets Jeju Shinhwa World apart from other Shinsegae outlets, which are located on the outskirts of cities. It is situated within a resort that houses a theme park, a water park, a convention center and a foreigners-only casino.

"We will transform the outlet in Jeju into a premium and luxury brand store big enough to attract both domestic and foreign tourists," said an official of Shinsegae Simon.

To differentiate the new mall from local shops, it has introduced Chanel and other luxury brands that had not yet landed on the island.

To achieve harmonious co-existence with local merchants, however, Shinsegae's mall does not feature popular brands that have been already introduced on the island, like Nike.

"To grow Jeju Island into a global tourist destination like Hawaii, we will host as many luxury brands as we can, which have never been launched on Jeju," the official added.

Jeju used to be a tough place for large retail groups to penetrate. Lotte's duty-free shop in the vicinity of Jeju International Airport raked in over 1 trillion won ($845 million) in annual sales before the onset of COVID-19. But it is a foreigners-only shop.  

To gauge interest in the Chanel brand on the island, Shinsegae opened a pop-up store in Hotel Shilla in Jeju in March of this year, at the height of the COVID-19 pandemic. It was the first temporary boutique of the luxury brand to open outside Seoul in South Korea.

"Despite no special promotions, it was all booked up in advance thanks to word of mouth and there was even an open run on the first day," said an official of Hotel Shilla.

Not only foreign designer labels like Chanel, but also the country's top luxury brands were surprised at the success of Chanel's pop-up boutique on Jeju Island, said the Shinsegae Simon official. This might underscore strong demand for luxury products on the island.

Jeju Shinhwa World has appointed a branch manager in his early 40s and hired 150 employees from the island despite the pandemic situation.