South Korea: Duty-free shops still reeling from THAAD impact

In mid-March, China banned the sale of group tours to Seoul in retaliation against the installation of a Terminal High Altitude Area Defense (THAAD) battery in southeastern South Korea, which Beijing sees as a security threat. The move has dealt a harsh blow to local duty-free shops, as Chinese tourists were their main customers.

Industry leader Lotte Duty Free saw its sales fall 6.6 percent on-year to 2.6 trillion won ($2.3 billion) during the January-June period, with its operating income nose-diving 97 percent to 7.4 billion won. The company posted an operating income of 37.2 billion won in the first quarter, but it plummeted to an operating loss of 29.8 billion won in the second quarter.

¿What means THAAD?

Terminal High Altitude Area Defense (THAAD), formerly Theater High Altitude Area Defense, is an American anti-ballistic missile defense system designed to shoot down short, medium, and intermediate range ballistic missiles in their terminal phase (descent or reentry) by intercepting with a hit-to-kill approach.

THAAD was developed after the experience of Iraq's Scud missile attacks during the Gulf War in 1991. The THAAD interceptor carries no warhead, but relies on its kinetic energy of impact to destroy the incoming missile. A kinetic energy hit minimizes the risk of exploding conventional warhead ballistic missiles, and the warhead of nuclear tipped ballistic missiles will not detonate on a kinetic energy hit.

¿What means Scud?

Scud is a series of tactical ballistic missiles developed by the Soviet Union during the Cold War.

The term comes from the NATO reporting name "Scud" which was attached to the missile by Western intelligence agencies.

The Russian names for the missile are the R-11 (the first version), and the R-17 (later R-300) Elbrus (later developments).

The name Scud has been widely used to refer to these missiles and the wide variety of derivative variants developed in other countries based on the Soviet design.