SSG.com and Lotteon are striving to secure’delivery speed’
E-Mart and Naver expand online and offline synergy
Lotte Shopping “Strengthen competitiveness in Lotteon’s’grocery’ sector”
[금융경제신문=한주경 기자] ‘Distribution Dinosaur’ Lotte and Shinsegae have entered a full-fledged confrontation over an e-commerce market worth over 160 trillion won.
Coupang, who professed to “take the lead” through aggressive investments on the occasion of listing on the New York Stock Exchange with the leader Naver, fights for the 1st and 2nd place, while Lotte and Shinsegae both fight for the 3rd place, eBay Korea, in the growing online shopping ecosystem. It is because there is a possibility that the business card will not be released.
The positions of E-Mart and Lotte Shopping, which have long reigned as’distribution dinosaurs’, are bound to be impatient. This is because, unlike the early 2000s, which was crowded with customers, if only offline stores were opened, it did not show a firm market presence amid the recent decline in offline stores.
E-Mart, a latecomer, says that it has built an’anti-coupang front’ through collaboration with Naver, but the first step is to close the gap with Lotte On, which is still being pushed back in the transaction amount.
Lotte Shopping also has to solve its homework from the crisis to rescue the e-commerce platform’Lotteon’, which is not producing such results even with the first anniversary of its launch.
The fierce competition that is unfolding inside and outside the grounds such as department stores, hypermarkets, discount stores, theme parks, and baseball is also spreading to the e-commerce industry.
First of all, what stands out is the will to acquire eBay Korea. The two companies announced that they are considering the acquisition of eBay Korea at successive shareholders’ meetings on the 23rd and 24th.
If E-Mart has eBay Korea, its biggest strength is that it will get powerful user-based data. E-Mart recently formed a blood alliance with Shinsegae Department Store to exchange shares worth 250 billion won in cooperation with Naver, the number one e-commerce market share.
The number of customers using Shinsegae Group reached 20 million, and the number of customers using Naver reached 54 million. The two companies will also secure 450,000 sellers through this combination. Moreover, Naver signed a large-scale logistics cooperation with CJ Logistics in October last year by exchanging shares worth 300 billion won.
As for E-Mart, it has secured more than twice the number of customers at once by joining hands with Naver. In addition, through the cooperation of various logistics partners of Naver, it is possible to deliver early morning delivery and same-day delivery services as well as immediate delivery, which arrives within 2-3 hours after ordering.
In such a situation, if eBay Korea is also in hand, the slow delivery problem that is pointed out as a weakness of eBay Korea will be solved with Emart-Naver’s logistics infrastructure, and SSG.com’s low e-commerce market share, which remains at the 3% level, is at once 15%. It can be raised
In particular, since Naver Shopping currently holds 17% of the market share, a clan of’e-commerce-based Avengers’, also known as Naver Shopping-eBay Korea-SSG.com, is established. In this case, it will rise to a level that overwhelms Coupang (13%).
In addition, SSG.com, which starts pilot open market operation from the 20th of next month, can solve the problem of the lack of number of sellers in stores, which can act as an initial weakness in the business, through the acquisition of ebay Korea.
Founded in 2000, eBay Korea has built a strong position in the domestic e-commerce market, accounting for 70% of the domestic open market market for a while, with more than 300,000 sellers. The large number of sellers means that there is a wide variety of products on sale. SSG.com can get its business right on track without investing time to recruit sellers.
In June 1996, if Lotte, the first Internet shopping mall in Korea, to enter the e-commerce market first, and take over eBay Korea, pioneer future food with know-how and pioneering initiatives in the e-commerce market that only Lotte Shopping has. It is expected to be possible.
This year, Lotte On announced that it will significantly strengthen the food competitiveness of the existing Lotte Department Store, Lotte Mart, and Lotte Super, focusing on differentiation. Since eBay Korea has strengths in industrial products, it can create synergies by making up for each other’s shortcomings.
For Lotte Shopping,’Lotte On’ is a painful finger. In April of last year, Lotte Group chairman Shin Dong-bin invested 3 trillion won to create’Lotte On’, but from the start of the launch, he suffered technical problems such as traffic overload and search errors.
According to Lotte Shopping’s business report on the 22nd, Lotte Shopping was appointed as an advisor to former e-commerce business manager Cho Young-je, who expressed his gratitude.
However, internally, it is known that all those recommended as the head of the Lotte On business are having a hard time finding a new representative. Chairman Dongbin Shin is also said to be uncomfortable with the current situation.
Lotte On recorded 137.9 billion won in sales in the e-commerce sector last year. This is a 27% decrease from 2019, before the integration of e-commerce sectors such as department stores, marts, and hi-marts. During the same period, the operating loss was 94.8 billion won, up 69% from the previous year. Sales decline and deficit increases, showing no signs of rebound.
Lotte Shopping expressed its ambition to reinforce delivery capabilities, a strategy similar to E-Mart, to save Lotte On this year.
Currently, Lotte On is providing a’direct delivery’ service that can package and deliver goods within 2 hours after ordering using the existing Lotte Mart’s logistics network. To increase this, it is planning to expand the’Smart Store’ and the Semi-Dark Store, which use offline stores as delivery bases.
‘Relay delivery’, which will further accelerate the speed of immediate delivery, has also been put to the test. Lotte On is piloting a new form of delivery system called’relay delivery’ with logistics startup PLZ at Lotte Mart’s Jamsil branch.
Existing delivery drivers are in charge of only the local base (CP), and after that, the goods handed over by the’plexer’ are delivered to the orderer’s house by their own motorcycle, bicycle, or vehicle.
Lotte On expects to reduce the delivery time by half if the delivery service is properly established. In addition, it is predicted that the maximum number of delivery cases will be doubled and the delivery area will be widened.
A Lotte On official said, “The’relay delivery’ service is an experiment to deliver goods to customers faster than a new delivery type. It is not yet clear whether we will continue to expand (service).”
He added, “This year, we will refine details such as’First Monday’ that customers can feel that they are actually receiving benefits,” he said. “We plan to focus on strengthening the competitiveness of the grocery sector.”
Reporter Han Ju-kyung [email protected]
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