Shinsegae reviewing online options

Date : 29 August 2017

In June, South Korea discount retailer E-Mart, part of the Shinsegae Group announced that they will focus on driving profitability through online sales. The retailer has two potential routes; investment in its online shopping channel or acquisition of an existing e-commerce platform.

Focus on online growth

With E-Mart's revenue almost entirely generated from operations in South Korea, and online sales the fastest growing channel in the country, it is no surprise to see the retailer looking to focus their efforts on growing their online presence. E-Mart could invest in its current online platform E-Mart Mall, but could also potentially acquire an existing e-commerce platform like SK Planet Co.'s 11street. The latter would stir-up much attention and would propel E-Mart's online business to one of the leaders amongst retailers. Further details on E-Mart's online strategy are expected to be announced later this year.

Sustain position at home and expand overseas

In 2016, E-Mart increased its hypermarket network by 1 store to 147 stores and closed money-losing outlets to maximise profitability. This trend is expected to continue, but their convenience banner, With Me has seen rapid expansion. In 2016, total number of stores grew 67% from previous year to 1,765 nationwide and there are now over 2,100 stores. BGF's CU and GS Retail's GS25 both operate over 10,500 convenience stores each, while Lotte's 7-Eleven operates over 8,500 stores. E-Mart will hope their rebranding of With Me to Emart24 and investment in redesign will help differentiate them from their competitors. 

Following E-Mart's recent withdrawal from China, the retailer will focus on fast-growing emerging markets such as Laos, Vietnam and Cambodia. E-Mart already operate in Vietnam for example, and recognise the great growth potential for retail expansion. Moreover, they will set-up their first flagship store in Cambodia by the first quarter of 2019. Success in these markets at a larger scale should help support overall profits for the retailer, particularly when performance of large formats at home across different retailers have been increasingly volatile.  

 

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