Kwak Yeon-soo is a digital editor at The Korea Times creating, editing and curating digital content for the newspaper’s website, mobile app and social media. She previously covered a diverse array of cultural, political and business topics.
Homeplus to quadruple online sales to $1.9 bil. by 2021
Homeplus CEO Im Il-soon speaks during a press conference at the Plaza Hotel in Seoul, Thursday. / Courtesy of Homeplus
By Kwak Yeon-soo
By Kwak Yeon-soo
Homeplus will quadruple its online sales to 2.3 trillion won ($1.9 billion) by 2021 by transforming 140 stores into online distribution centers and expanding “special” stores nationwide, the company said Thursday.
The retailer plans to increase the number of “Homeplus special” stores, which combine the characteristics of hypermarkets and warehouse-style stores, to 80 from the current 16.
While unveiling Homeplus' business strategy, CEO Im Il-soon said the average sales growth rate of special stores was higher compared with regular stores.
“The average sales growth rate of special stores was 12 percent higher than that of regular stores and 20 percent higher than that of our rivals operating nearby. Thus, we plan to expand to 30 special stores by end of this year and 80 by 2021,” Im said.
“We also aim to grow sales by expanding online business. We will transform 140 stores into online distribution centers and increase online sales of 2.3 trillion won by 2021 from 600 billion won last year.”
Im explained that converting stores to online distribution centers will be both cost effective and time saving because the company does not need to spend extra money and time to construct new logistics centers.
Homeplus said it will reinforce its daily delivery services and provide a “shocking” ― a combination of the words “shopping” and “picking” ― experience to its customers.
The company said it will increase the number of “pickers,” or those who collect the products for an order, from 1,400 to 4,000 and the number of cold-chain delivery trucks from 1,000 to 3,000.
These changes will enable the retailer to process 120,000 daily orders from the current 33,000 orders.
The CEO also said Homeplus will enhance the competitiveness of private-label products and globally sourced goods. Homeplus has collaborated with U.K.-based Tesco for better private-label products.
As for global sourcing, the Korean company will continue to affiliate with a European distribution network worth about 250 trillion won.
When asked about how she feels about the intensifying competition between retailers and grocery delivery services like Coupang and Market Kurly, Im said she is wary of their sustainability.
“The price competition is getting tough, but I'd like to question their sustainability,” Im said.
“Amazon and Alibaba were able to gain price competitiveness by battling out competitors, but I don't think such occurrences will happen here in Korea.”
Regarding the “Boycott Japan” campaign that is gaining steam among Korean retailers, Im said Homeplus does not have immediate plans to halt ties with Japanese suppliers.