Korean retailers: 60 second update

Date : 16 December 2014

We round up the latest news as Emart pulls back in China, Lotte launches a new fresh grocery ecommerce site and 7-Eleven delivers a new level of convenience to shoppers.

New "Lotte Fresh" site to boost retailer's online credentials

This week Lotte has unveiled a new online supermarket platform, "Lotte Fresh". The site is linked to the retailer's supermarket banner, Lotte Super. Orders will be fulfilled by a new distribution centre dedicated to online grocery. This guarantees delivery within three hours, which is free for orders over KRW 20,000 (US$18). At time of launch, 4,200 products are available through the site.

Korea is one of the most sophisticated online grocery markets in the region, with top players Emart, Homeplus, Lotte and GS all competing. As in all markets, fresh categories represent a big challenge. Flexing the strength of their multi-channel operations and extensive supply chains will be key to beat agile players who are moving to compete in this area, like marketplace eBay with G-Market Fresh, a service which enables shoppers to buy directly from farms.

7-Eleven trialling delivery to home

7-Eleven, operated by Lotte in the Korean market, will offer a deliver service to locations within 300 metres of the store, reports Korea JoonAng Daily. Shoppers will need to spend a minimum of KRW 10,000 (US$9) to qualify, and have goods delivered between 9am and 9pm. Orders can be placed by phone. Four stores in Seoul will pilot the service, with plans to roll it out further if successful.

Lotte announced its intention to implement an omnichannel-focused strategy across its retail business earlier this year - an early output of this is the trial of ibeacons in store. Whilst this 7-Eleven delivery service is initially accessed by telephone, we expect to see the application of m-commerce, and in the long-term, greater integration with Lotte's online delivery services.

Emart scales back stores in China, explores Vietnamese opportunities

Emart has announced plans to close five stores in China, reducing its total to ten stores. This move follows the earlier closure of 11 stores in 2011. A full retreat from the market is now expected.

"We decided on the closure as profit worsened due to an unfavourable sales environment, such as weakening competitiveness, and high property costs" said Kim Seok-beom who heads up Emart's business in China, reports the Korea Herald.

The Korean retailer is reportedly investigating opportunities in the Vietnamese market, where it would compete alongside rival Lotte, as well as a flurry of new entrants seeking to realise the opportunities this ASEAN markets promises.

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