S. Korea's Lotte retail group strengthens online e-commerce business

Lim Chang-won Reporter Posted : 2018-05-15 16:48 Updated : 2018-05-15 16:48
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[Courtesy of Lotte]

SEOUL -- South Korea's top retail group Lotte unveiled a new strategy to bolster its e-commerce business by integrating online malls used by eight units into an integrated platform as online sales rise sharply to become the group's new growth engine.

The group said Tuesday it would invest some 3 trillion won ($2.8 billion) to launch and operate a new online e-commerce division in August under the control of Lotte Shopping, the operator of Lotte hypermarkets and department stores. In a related move, Lotte Shopping would absorb the group's e-commerce affiliate, Lotte.com.

By 2020, Lotte hopes to unveil an integrated online platform covering all retail outlets and duty-free shops. The group has teamed up with IBM to develop a voice commerce system using artificial intelligence.

In an effort to become South Korea's top retail group, online and offline, Lotte aims to generate about 20 trillion won in online sales by 2022. Last year, Lotte Shopping's online revenue stood at 7 trillion won, standing third after the country's two leading online shopping mall websites, Gmarket and 11STREET.

Lotte's domestic rival, Shinsegae, has also strengthened its e-commerce business. In January, the group forged a deal with two foreign firms on an investment of about 940 million US dollars into its integrated e-commerce division aimed at nurturing online shopping malls.

Shinsegae aims to launch a separate e-commerce unit this year by combining the online business divisions of Shinsegae Department Store and its discount store chain operator, E-Mart. The new unit would become the group's key distribution channel with an annual revenue of 10 trillion won by 2023.