Lotte Duty Free said Friday that it signed a memorandum of understanding with the South Korean travel agency Modetour on Thursday to strengthen joint marketing efforts toward Korean tourists to Vietnam.

Under the agreement, Lotte Duty Free and Modetour will work together to develop new product packages combining duty-free shopping and tourism in Vietnam.

Lotte Duty Free has been grappling with the decline of Chinese tourists to South Korea due to an economic slowdown. As an alternative, the company aims to enhance the profitability of its Vietnamese branches, an official from Lotte Duty Free said.

In 2023, Lotte Duty Free's annual sales in Vietnam increased by 351 percent on-year, with Korean tourists making up about 60 percent.

Lotte Duty Free, which entered the Vietnamese market in 2017, operates a total of four duty-free shops in major airports and tourism cities in Vietnam, including the Danang, Nha Trang and Hanoi Airports, and the coastal city Da Nang.

“In response to Korean tourists’ growing demand for duty-free shops in Vietnam, particularly after the pandemic, we have partnered with Modetour to enhance customer benefits,” said Lee Seung-jun, head of Lotte Duty Free’s overseas business department.

Lee Woo-Yeon, director of Modetour's Southeast Asia business division, said, "As Vietnam is one of the most popular destinations for Korean travelers, we expect to provide better services through this MOU with Lotte Duty Free."

"We will continue to work closely together to expand our services, ensuring customers who use Modetour can enjoy more benefits at Lotte Duty Free's stores not only in Vietnam but also in Guam, Singapore and Australia."

As of January 2024, the South Korean duty-free shop operator runs a total of 14 overseas branches; two in Japan, one in the US, four in Vietnam, five in Australia, one in the Netherlands and one in Singapore.