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Starbucks to boost business with e-commerce affiliates

A customer orders beverages and food on Starbucks Korea's mobile application in Seoul on Dec. 10, 2020. Korea Times fileBy Kim Jae-heunStarbucks Korea will strengthen its collaboration with e-commerce affiliates such as SSG.com and Gmarket Global to expand its online sales by utilizing live commerce, the largest coffee chain operating here said Monday. E-mart, the country's largest discount store chain operator, has a 67.5 percent stake in Starbucks Korea and also controls SSG.com and Gmarket Global.Starbucks Korea has been seeking to diversify its online business with its popular special gifts and e-coupons for caffeine beverages. In December, it held a live commerce show on Naver selling special Christmas tumblers, mugs, pouches and kettles. Live commerce is a new marketing strategy where a company sells products through a livestream on a digital platform, often in collaboration with social media influencers. However, Starbucks Korea said it has no plans to open the live video shopping service on its own platform. Membership on Starbucks' mobile application here in Korea has grown

Feb 16, 2022By Kim Jae-heun
Starbucks to boost business with e-commerce affiliates
Companies

Instant noodle makers see business slowdown in 2021

Nongshim's Chapaguri instant noodles / Courtesy of NongshimBy Kim Jae-heunThe country's top three instant noodle makers saw their bottom lines deteriorate in 2021 due to soaring labor, raw materials and other costs, according to company officials Wednesday. According to regulatory filings, Nongshim, Ottogi and Samyang Food's profits plunged by 33.8 percent, 16.1 percent and 31 percent, year-on-year. “In 2020, the demand for instant noodles soared in the country as the government decided to adopt quarantine measures for the first time at the start of the COVID-19 pandemic,” a Samyang official said. “However, as the pandemic continued, the demand started to decrease and returned to normal in 2021.”Samyang's operating profit peaked at 95.3 billion won in 2020, up by 21.9 percent from a year earlier. Market leader Nongshim's profit also skyrocketed by 103.4 percent to reach 160.2 billion won in the same period. The food firm said its “Chapaguri” noodle combination gained huge popularity after appearing in the mega-hit film “Parasite” in 202

Feb 16, 2022By Kim Jae-heun
Instant noodle makers see business slowdown in 2021
Companies

Lotte continues investing in digital transformation despite sluggish online business

Lotte ON CEO Na Young-ho and the e-commerce firm's corporate logo / Korea Times fileBy Kim Jae-heunLotte Group will continue to expand investments into its e-commerce businesses, including urban air mobility (UAM) services and the metaverse, despite its growing losses from online shopping, according to company officials Tuesday.Last year, its retail unit Lotte Shopping marked sales worth 15.58 trillion won and an operating profit of 215.6 billion won, down respectively by 3.7 percent and 37.7 percent year-on-year. Its e-commerce revenue declined by 21.5 percent to show 108 billion won, while its operating loss increased by 64 percent to reach 156 billion won in the same period. Only its department store business put up a good defense, while the rest did poorly.However, Lotte shows no sign of making changes to its current plans for the e-commerce sector.UAM is a transportation service using small aircraft, such as flying cars that can take off and land vertically. Lotte plans on utilizing its drones to deliver online orders to isolated areas that cannot be reached easily by road.&ldqu

Feb 16, 2022By Kim Jae-heun
Lotte continues investing in digital transformation despite sluggish online business
Companies

Danggeun Market plagued with disputes among users

Danggeun Market CEO Kim Jae-hyun poses with the company's mascot at his office in Gangnam, Seoul, in this 2019 file photo. / Korea times fileBy Kim Jae-heunDanggeun Market, the country's largest online flea market platform, reported 1,620 customer-on-customer disputes last year, according to independent lawmaker Yang Jung-suk Monday.As more people trade secondhand items online, conflicts between individual sellers and buyers have been increasing. “Last year, I bought a used tablet PC on Danggeun Market and it broke only a month later. I tried to find the seller but he was gone. People use false names here and that makes it harder for us to find the swindlers later,” a 32-year-old office worker surnamed Kim said. Unlike open market services operated by e-commerce firms ― where the companies take responsibility for any defective products they sell ― it is difficult to hold individuals responsible on Danggeun Market. Danggeun Market users are left to fix their own problems in customer-to-customer (C2C) trading. For the protection of customers' personal information, Danggeun

Feb 14, 2022By Kim Jae-heun
Danggeun Market plagued with disputes among users
Companies

GS Retail's e-commerce business under question

A delivery driver holds a bag containing items ordered from GS Retail's online mall in front of a GS25 convenience store in Seoul, in this photo dated June 21, 2021. YonhapBy Kim Jae-heunGS Retail, which operates one of the largest convenience store chains here, has come under intense scrutiny as its e-commerce business strategy has failed to generate profits in the rapidly growing retail sector, according to market analysts Monday.Last year, the company acquired Yogiyo, the country's second-largest food delivery platform, to focus on “quick commerce” by generating synergy with its vast network of 15,000 GS25 convenience stores, but the firm's bottom line has deteriorated.GS Retail's convenience store business achieved an operating profit of 31.6 billion won ($26.37 million) in the fourth quarter of 2021, down 15.5 percent from a year earlier.“Our convenience stores' operating profit fell due to increased advertising costs and one-off payments for marketing. Also, the number of visitors to the stores decreased as the Omicron variant spread rapidly in the country,&rd

Feb 14, 2022By Kim Jae-heun
GS Retail's e-commerce business under question
Companies

Coupang to strengthen health food business with new CEO

By Kim Jae-heun CPLB CEO Chun You-won E-commerce giant Coupang has appointed a pharmacist as the new co-CEO of Coupang Private Label Business (CPLB), part of its plan to expand into the “functional food for health” sector. CPLB is Coupang's subsidiary in charge of selling private brand health food, dietary supplements and skincare products. The size of the local functional food for health market ― which includes herb-based health foods and supplements that are supposed to be good for people's health ― grew to more than 5 trillion won last year, but the products are mainly sold offline. The e-commerce firm wants to bring a portion of them online to boost CPLB's business, while having the new co-CEO, Chun You-won, review whether the products are eligible for sale. Chun built her career at Pfizer Korea for eight years from 2012 to 2020, liaising with the government on registering licenses for drugs and dietary supplements. She also took the same job for a year at British

Feb 13, 2022By Kim Jae-heun
Coupang to strengthen health food business with new CEO
Companies

AmorePacific to boost online sales in 2022

Korea's top beauty firm seeks expansion in North America By Kim Jae-heunAmorePacific, Korea's largest cosmetics maker, will increase investments to boost its online sales and expand its reach in North America, in a bid to reduce its reliance on China and other Asian markets, according to company officials Thursday.“Our plan to reinforce our online business is still valid in 2022,” an AmorePacific official said. “Currently, our online revenue takes up some 30 percent of overall sales and we expect it to rise up to 50 percent in the next year or two.”In Korea, AmorePacific will focus on collaborating with local e-commerce firms like SSG.com, Ably and Musinsa, with which it can expand its retail channels. Last year, the cosmetics firm established partnerships with IT giants like Naver, Coupang and Kakao to help it achieve a turnaround in the fourth quarter of 2021. The cosmetics firm will not open any more franchise stores for its affiliate brands here, but instead introduce one or two flagship shops in Seoul to promote its brands by offering customer experience

Feb 10, 2022By Kim Jae-heun
AmorePacific to boost online sales in 2022
Companies

Homeplus fined for shifting promotion costs to suppliers

A customer shops at Homeplus' grocery store in Seoul on Jan. 27. YonhapBy Kim Jae-heunHomeplus, one of Korea's three major discount store chains, was fined 2.42 billion won ($2.01 million), Wednesday, by the antitrust agency for shifting discount promotion costs to its suppliers between January 2017 and January 2021. The Fair Trade Commission (FTC) also ordered the retailer to correct the business practice.Homeplus' supermarket unit, Homeplus Express, offered a marketing event of “buy one, get one free” for products of 45 suppliers including Ottogi and Yuhan Kimberly. It did not communicate this to the vendors and unfairly passed on sale promotion costs of 1.7 billion won ($1.42 million) to them. And when Homeplus gave a 500 won discount for a 2,000 won product, it paid only 200 won of the difference and passed on the remaining 300 won burden to the suppliers.Homeplus also violated the Fair Trade Act by delaying the issuance of 86 contracts signed with suppliers by up to three days during a four-year period.“We haven't received the FTC's resolution so it is difficul

Feb 10, 2022By Kim Jae-heun
Homeplus fined for shifting promotion costs to suppliers
Companies

Retailers seeking new growth engines with NFT, metaverse

By Kim Jae-heunHome shopping channels and other retailers here are going virtual to find new sources of income, targeting mostly cyber-savvy young consumers as they struggle to maintain their traditional businesses amid a rapidly changing market environment, according to industry officials Wednesday.Companies like Lotte Homeshopping, GS Shop and CJ OnStyle have been facing difficulties to improve their declining profitability that has been affected by the emergence of e-commerce firms and a price hike in broadcasting fees. Broadcasting platform operators here have increased their fees for home shopping operators by 20 percent to 30 percent in recent years.The growth of home shopping operators is also hindered by the Broadcast Act as well as their public obligations to protect viewers and pay a broadcasting development fund to the government. Meanwhile, there aren't many obstructive factors for metaverse retail operations yet as they are run mainly on mobile platforms. This has been leading companies to eye a livestreaming shopping service.Lotte Homeshopping is most active in this reg

Feb 9, 2022By Kim Jae-heun
Retailers seeking new growth engines with NFT, metaverse
Companies

Chanel to withdraw downtown Seoul duty free shops

Customers wait in line to purchase Chanel products at Lotte Department Store in Seoul prior to the price hike in June 2021. YonhapBy Kim Jae-heunFrench luxury fashion house Chanel will withdraw its duty free business from downtown areas starting from March, market insider said on Tuesday. Chanel has been operating only two duty-free stores in Busan and on Jeju Island outside of Seoul in Korea.“International luxury firms have recently been rushing out from the local duty free sector to maintain their premium brand image which has been tarnished by “Daigou” (surrogate shoppers from China). They have been asking for excessive discounts here and some of them have even resold luxury products they purchased in Korea with counterfeit ones in their homeland,” the source said. Chanel has taken action against “Daigou” as their purchasing power grew uncontrollably big in Korea. Nearly 90 percent of local duty-free shops' sales in downtown stores come from surrogate Chinese shoppers as COVID-19 continues around the world. Rolex and Louis Vuitton also decided t

Feb 9, 2022By Kim Jae-heun
Chanel to withdraw downtown Seoul duty free shops
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