Shinsegae, Lotte seek new markets as domestic consumption slumps

Lotte Mall West Lake Hanoi shopping center in Vietnam, Nov. 28, 2024 / Yonhap

Shinsegae Group and Lotte Group — two main retail giants in Korea — are grappling with the problem of discovering new progress engines in markets abroad as personal consumption continues to say no at dwelling.

That is a part of their efforts to offset falling revenues in Korea, as shopper confidence continues to dip within the aftermath of extended excessive rates of interest. Of explicit concern is that the macroeconomic uncertainty is unlikely to take a flip for the higher within the close to future.

In response, Shinsegae is adopting a two-track technique of boosting abroad gross sales each on-line and offline. The corporate just lately clinched a partnership with Alibaba Group to increase gross sales channels worldwide.

Underneath the most recent deal, sellers from Shinsegae Group’s e-commerce arm, Gmarket, will have the ability to widen their gross sales networks to different nations by using Alibaba’s globalized platform experience.

The Korean retail large can also be on target to increase its abroad gross sales offline by establishing extra E-Mart shops in Mongolia. The group goals to construct 15 E-Mart shops there by 2030. E-Mart is Korea’s largest retail retailer chain.

An E-Mart retailer in Ulaanbaatar, Mongolia / Courtesy of E-Mart

The corporate identifies Southeast Asia as its subsequent main income generator. Shinsegae operates a complete of three E-Mart shops in Vietnam, and plans to increase its footing into Laos with a plan to open 20 E-Marts there over the subsequent decade.

Lotte Group goals to faucet deeper into international markets with a strategic concentrate on constructing extra buying malls. Lotte’s Time Villas mall is the next-generation money cow for Lotte Division Retailer.

Underneath the drive, the corporate seeks to extend its gross sales portion overseas regularly. Time Villas is a brand new shopping center model pushed by Lotte. The primary Time Villas shopping center opened final October in Suwon, Gyeonggi Province. The corporate plans to open extra Time Villas malls right here and overseas.

In 2023, Lotte Division Retailer opened its much-hyped West Lake Hanoi shopping center complicated within the Vietnamese metropolis.

“Such conventional retail giants haven’t any selection however to resort extra to abroad markets to defend towards any surprising macroeconomic shocks,” an official from a retail agency stated. “Extra retail corporations will observe related footsteps, because the home consumption hunch is feared to persist for an extended time period.”

Comfort retailer chains are additionally ramping up their abroad enlargement on rising demand significantly for Korean meals merchandise. In response to GS25, an area comfort retailer chain, its exports reached round $9 million (13.2 billion received) final yr.

It is a whopping progress from 2017 when the determine reached a mere 220 million received. GS25 operates a complete of 355 shops in Vietnam and 267 in Mongolia, however plans to extend the quantity to greater than 500 for every nation by the top of 2025.