 |
| Illustration of Shinsegae's new theme park to be built by 2030 / Courtesy of Gyeonggi Province |
By Kim Jae-heun
The country's largest retailer E-mart is bucking global trends, building more shopping malls and opening a new theme park instead while others are closing down their stores.
This is the opposite direction that E-mart's rival Lotte Shopping has taken, which decided to close down 30 percent of its stores over the next few years and concentrate on its online business, LOTTE ON.
Chung Yong-jin, vice chairman of Shinsegae Group that owns E-mart, said he wants to sell "experience" to his customers.
Last November, Shinsegae Group announced it will invest 1.46 trillion won over the next three years in building more Starfield shopping malls around the country, nearly half the amount of overall investment that E-mart is putting into its retail business.
Furthermore, the retail giant also plans to open the country's largest theme park in Hwaseong, Gyeonggi Province, by the end of 2030. Shinsegae said it will spend 4.6 trillion won through Shinsegae Property Consortium.
Acquiring SK Wyverns, a professional baseball team formerly owned by SK Group, is one of E-mart's strategies to gather people for entertainment and naturally lead them to buy products at its shopping centers and stay at hotel chains operated by Shinsegae Group.
However, there are mixed predictions about E-mart's future plans.
The global trend is that many retail giants have already shifted toward online platforms as digital transition has been inevitable in the COVID-19 pandemic era.
Skyrocketing sales of Amazon in the United States and Coupang as well as Naver Shopping in Korea showed how e-commerce is no longer an alternative but an imperative that retailers must pursue.
Lotte Shopping, a latecomer to the online gold rush, paid for its idleness, with its operating profit last year plunging by 19.1 percent to 345.1 billion won. The poor performance of its department store and movie theater chain businesses contributed to the weak earnings.
Chung, however, finds his answer in the success of Starbucks in Korea. Many predicted that Starbucks Korea would face fierce competition from the number of new coffee chains expanding in the country during the last decade.
However, Starbucks focused on offering special experiences to customers when they visit the U.S. coffee chain's stores. Customers not only expect to drink good caffeine beverages, but also enjoy their time there. This has enabled Starbucks Korea to be the most flourishing firm in the local food and beverage sector.
Unlike the market's outlook, Starbucks Korea has been showing double-digit growth every year since 2016 and revenue soared to 1.86 trillion won in 2019.
Chung emphasized the pursuit of creativity and the ability to read consumer trends quickly. He believes his new rival in the near future will not be an e-commerce firm but a theme park or a baseball stadium.
