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| Hyundai Department Store Trade Center branch / Korea Times file |
By Kwak Yeon-soo
Hyundai Department Store will sell its products on Coupang, becoming the first department store to partner with Korea's largest e-commerce firm by sales, as more and more Koreans shop online, the company said Sunday.
Hyundai said it will sell products and services on Coupang's open market, a system in which a seller pays commission fees to an e-commerce platform.
It is highly unusual for a major department store, which mainly deals with luxury goods, to sell via an e-commerce platform, which triggers price competition.
Hyundai said the decision was not intended to take part in a brutal price war, but rather to raise brand awareness and accessibility to its offerings.
"We decided to partner with Coupang and sell our goods on the platform to increase access to our products and attract new customers," a company official said.
"We will continue to seek strategic partnerships with other e-commerce companies in the future."
The relatively small size of Hyundai's online shopping mall business is seen as another reason for beginning sales on Coupang.
Unlike Lotte and Shinsegae, which own Lotte Mart and E-mart, respectively, Hyundai does not own a large supermarket chain that can directly compete with Coupang.
In addition, department store chains are increasingly under pressure with more people shopping online. They are also struggling to attract millennial shoppers who prefer to choose less expensive goods and buy directly from their favorite brands.
Last year the three major department stores ― Hyundai, Lotte and Shinsegae ― showed indications of weakness.
Year-on-year Hyundai saw sales rise just 1.4 percent in 2018, while Shinsegae reported a 4.6 percent gain. Sales at Lotte declined 4.6 percent.
By contrast, e-commerce giants saw double digit growth last year.
Coupang posted annual sales of 4.42 trillion won in 2018, up 65 percent from a year earlier.
TMON showed a 40 percent increase in sales in 2018, while Ebay Korea saw its sales grow 3 percent.
Digital-savvy young consumers have been flocking to e-commerce firms to purchase goods.
As a result, Coupang scored the highest point total in overall consumer satisfaction, according to a survey by the Korea Consumer Agency.
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