With the South Korean won weakening to the lowest level against the U.S. dollar since the 2008-2009 financial crisis, businesses catering to foreign tourists, including travel and duty-free retail, are eyeing potential opportunities. While a weaker won is likely to discourage Koreans from traveling abroad, it could make South Korea a more attractive destination for international visitors.
The most prominent example is Japan. The country has been experiencing a surge in foreign tourists since the yen’s value depreciated to the lowest level in 30 years, to the point that critics have raised concerns about overtourism. According to the Japan National Tourism Organization, 3.187 million foreign tourists visited Japan last month, reaching a cumulative 33.37 million from January to November, already surpassing 2019 pre-pandemic levels.
The weak yen has attracted tourists from South Korea and China in droves, leading to shopping frenzies at Japanese department stores. “Chinese resellers and tourists often snap up products in bulk, making it difficult for others to secure popular items,” said a Japanese proxy shopping agency representative.
Korea’s duty-free industry is also hoping for an increase in foreign visitors. With the won-dollar exchange rate rising, meaning the won’s value is falling against the dollar, foreign tourists can purchase Korean cosmetics, clothing, and gifts at lower prices. For instance, JungKwanJang’s Red Ginseng Extract Capsule Royal (240g), a popular gift among tourists, costs $175 based on current exchange rates, down from the previous $181. Amorepacific’s Sulwhasoo Yunjo Essence Duo (90 ml) is now available at $152, down from $158.
This price adjustment follows recent changes by major duty-free retailers such as Shinsegae, Lotte, and Shilla. Duty-free companies raised the reference won-dollar exchange rate for domestic cosmetics, fashion, general merchandise, and food brands from 1,350 won to 1,400 won per dollar. At duty-free shops, domestic products are priced by multiplying their regular retail price by the posted exchange rate. For example, a product priced at 10,000 won would have been sold at approximately $7.4 under a 1,350 won rate but now costs about $7.1 under the new 1,400 won rate.
Experts are optimistic about Korea’s tourism prospects, provided the country maintains a positive image and is not disrupted by natural disasters. The number of foreign tourists visiting Korea next year is expected to reach 18.73 million, up 7% from 2019, according to an AI model developed by Yanolja Research.
