Shin Dong-bin, who attacked Coupang a year ago…The reason why he couldn’t smile even though his performance improved [앤츠랩]

Coupang was recognized for a ransom of 85 trillion won by listing on the New York Stock Exchange. However, just one year ago, in March 2020, there is a person who shot Coupang, saying, “Even though it makes a deficit of more than 100 billion yen (1 trillion won) every year, there is no intention of competing with a company that is preserved by shareholders (Softbank).” Right away Lotte Group Chairman Dongbin Shin(Interview with Nihon Keizai Shimbun in Japan). What will he think of when he sees the current Coupang? The companies to look into Ants Lab are Lotte Shoppingis.

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· Profitability improves by reducing SG&A expenses due to the closing of the store.

· Completely alienated from the’Distribution Three Kingdoms Era’

· Unless drastic change is achieved, a real turnaround is difficult

Turn around. It is a representative word that describes the situation of Lotte Shopping in 2021 in the securities market. It has already hit bottom in 2020, and it is said that this year’s performance will finally revive. So this is the’performance improvement stock’ and the’undervalued stock’? Is the target price of a securities firm continue to rise? If you’re in trouble, wait a minute

Based on last year’s sales (16 trillion won), Lotte Shopping consists of Lotte Mart (37.6%)-Lotte Hi Mart (25.2%)-Lotte Department Store (16.5%)-Lotte Super (10.3%)-Lotte Home Shopping (6.7%). is. Of these, Lotte Mart succeeded in turning to the black last year, department stores managed to profit from coronavirus, and Hi Mart cruised thanks to an explosion in consumer electronics demand.

The problem is that a large portion of the profits of marts and department stores SG&A cost reduction It’s because of it. Why did the SG&A fee decrease? Because there are many closed stores. In 2020, we restructured 119 stores in the red a year, and we are closing more than 70 stores this year. As the restructuring is in the final stage, it is said that profits will increase from this year. It is not something to laugh about because it is the result of business contraction, not growth.

It’s more worrisome online. The integrated platform’Lotte On’, which was launched last year, has not been stabilized for a long time. Despite the launch of Lotte On, Lotte Shopping’s online transactions grew by only 7.0% last year. It is far below the growth rate of domestic online shopping transactions (19.1%) (there was no synergy effect). When it comes to luck, the CEO (Executive Director) of the Lotte On business unit was hard at work last month.

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The online distribution market is literally in the midst of a’war’. As of now, Korea is in the’Online Distribution Three Kingdoms Era’ (Hana Financial Investment). Here, the Three Kingdoms are Coupang, Naver, and SG (SSG).com (there is no Lotte). Coupang, the strongest player, started to build a monopoly system with the opportunity of an IPO in the New York Stock Market. Because of this, Naver and Sup.com are trying to turn the plate over with hands. But what about Lotte?

First of all, Lotte participated in the preliminary bidding of eBay Korea (Gmarket·Auction·G9) as if they were going to do anything. Kang Hee-tae, vice chairman of Lotte Shopping’s CEO, said at the shareholders’ meeting on the 23rd, “We have enough interest in the acquisition of eBay Korea.” However, it would be better not to do it in the judgment of Ants Lab. EBay Korea, a pure open market, competes with the lowest price policy. Shipping competitiveness is behind Coupang, and in platform power, Naver. Convenience is more important than price in online shopping these days. It seems to be the end in a word? But the acquisition price is 5 trillion won?!

Then, is there any possibility for Lotte Shopping in Young Online? It doesn’t. The combination of online and offline, so-called omnichannel, has many successful models abroad. Wal-Mart in the United States is a representative example.

And it is Lotte Shopping that has continued to push the omni channel in Korea. Chairman Dongbin Shin has ordered it since 2014. The advertising copy in 2018 was’Live omni‘It was enough. In 2020, four Lotte Mart stores were converted into’smart stores’, and offline stores were also converted into delivery locations (Chinese Herma Sensheng model). Lotte On introduced early morning delivery to all parts of Busan. But this change, indeed I can’t speed up. To find out the reason, Culture (people).

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When Wal-Mart acquired the online shopping mall Jet.com in 2016, it left Jet.com founder (Amazon) Mark Roer to lead the entire Wal-Mart e-commerce business. And Mark Rohr led the digital revival by completely changing the nature of the retail dinosaur Wal-Mart. (Jet.com was actually closed in 2020, but why experts say the M&A wasn’t a failure)

Lotte Shopping Traditionally department store centricIt is a company. In addition, the e-commerce division’s representative is only in the’Executive Director’ position, so it is difficult to obtain cooperation from affiliates. Lotte Shopping appoints Na Young-ho, head of eBay Korea’s strategic business division as the head of the new business division.I did. But it remains to be seen whether he can really give him full power and change his organization. (An analysis also shows that Lotte will be more active before the acquisition of eBay Korea.)

Off-line hypermarkets that can serve as distribution warehouses, differentiated product configurations unique to department stores, competitiveness in fresh food, electronic product stores in showrooms, and above all, even real estate! It’s a rich family with a lot of things, so it looks like it has potential. Haven’t found any breakthroughs online so far Undervalued (PBR 0.34x) escape is difficult for the time being. The performance may have hit the bottom, but it doesn’t look like a real’turnaround’.

In conclusion, after 6 months

It was said that tyrannosaurus was also fast when hunting. Can you speed it up now?

by. Ants Lab

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