Monday, November 18th, 2013
SEOUL, KOREA - Lotte and Shinsegae, the two rivals in the retail industry, are competing to take the leading position in Seoul's metropolitan area by employing two quite different strategies.
Whereas Lotte focuses on opening new discount outlets for low-priced clothing items, Shinsegae is hard at work to build suburban shopping malls doubling as entertainment venues such as multiplex movie theaters and restaurants.
Lotte Department Stores said on November 17 that it would open a new retail outlet in the express bus terminal in Goyang in the northwest of Seoul in April next year. The retail group also said it will be followed by two more outlets in Guri and Suwon in December 2014 and early 2015. The main rationale for Lotte building shopping outlets is outlet sales are on the rise despite the overall decline in consumer spending. The sales revenue of Lotte Department Stores' discount outlets increased 49 percent for the year to date. During the same period, its department store sales stopped short of rising 8.5 percent.
In contrast, Shinsegae will face the competition by opening as many suburban shopping malls as possible. The company currently has plans to build such malls until 2016 in metropolitan locations including Hanam, Euiwang, Samsong, and Chungna, all within one-hour driving distance from downtown Seoul. Shinsegae figures that more and more families will go to suburban malls as a way to spend leisure time as well as to shop. The company plans to host more luxury brands in the malls.
