Lotte and Shinsegae, the nation’s two retail giants, are planning to build shopping complexes in Seoul and neighboring cities to curb the rapid growth of online retailers.
By 2018, Lotte plans to open four shopping malls -- two in Seoul and the other two in Incheon -- to lure customers wanting to enjoy shopping and cultural activities at one site.
The malls will be outfitted with retail stores, supermarkets, movie theaters and restaurants on floors ranging in size from 160,000 square meters to 410,000 square meters -- equivalent to the size of 70 football fields.
Lotte has already been aggressively pursuing the one-stop shopping mall strategy, most notably with the opening of the huge Lotte World Mall that opened in the Jamsil area of Seoul in October 2014. Lotte World Mall houses brands that span the price spectrum, as well as a movie theater and a classical concert hall that is set to open later this year.
Bird's-eye-view plans for the Lotte mall set to open at Incheon Terminal (Lotte/Yonhap)
“Competing with (cheaper) product prices no longer works for now,” a Lotte official said.
“Our goal is to constantly attract customers by offering a space where they can stay and (enjoy cultural) experiences.”
Shinsegae will also open shopping complexes in Hanam, Goyang and Anseong, all of which are in Gyeonggi Province. The first will be the 330,000-square-meter Hanam Union Square, set to open in September.
Lotte and Shinsegae appear to be making hefty investments in shopping malls to deter the rapid expansion of online operators in the retail market, according to industry sources quoting data. The projects are designed to amplify the pleasure of shopping and cultural activities -- realistic features that online operators cannot offer.
According to a report from Statistics Korea, sales at department stores have been falling steadily since 2013, from 29.8 trillion won ($25.7 billion) to 29.2 trillion won in 2015. Department stores accounted for 8 percent of total retail sales in 2015, down from 8.4 percent in 2013.
Meanwhile, online and mobile shopping sales figures have been on a steady climb, from 38.5 trillion won in 2013 to 53.9 trillion won in 2015.
By Won Ho-jung (firstname.lastname@example.org