Lotte Group chairman Shin Dong-bin is speaking to the representatives of affiliates and executives while wearing a mask at a conference held by video conference on the 13th of last month. On this day, Chairman Shin strongly ordered innovation based on digital transformation. Lotte provided
Cho Young-je, who led the Lotte Group’s integrated mall’Lotte On’ business, is resigning from his position, the CEO of Lotte Shopping’s e-commerce division. Lotte Group chairman Shin Dong-bin on the 13th of last month said, “For companies that cannot be transformed into innovation, consider boldly reviewing portfolio adjustments.”
After joining Lotte Department Store in 1990, CEO Cho joined the Lotte Department Store in 1990 and served as the head of Lotte Shopping’s eCommerce business division since January last year. He is an authentic’Lotte Man’ who has been with Lotte for 30 years.
According to Lotte Holdings, CEO Cho took responsibility for poor management and resigned, but in the industry, it is interpreted that Chairman Shin pulled out a replacement card for the head as Lotte On continued sluggish performance at the forefront of digital transformation and strengthening online/offline synergy. . As such, Lotte On’s performance did not meet expectations in terms of service provision, sales, and group synergy.
It creaked from the start… Can’t save the chance of Corona 19
On April 27, last year, Cho Young-je, CEO of Lotte Shopping’s e-commerce division, presents the Lotte On business strategy at a briefing session. Provided by Lotte Shopping
Immediately after launching in April of last year, Lotte On showed an uneasy start due to traffic (access) overload and computational errors. Although the stabilization process proceeded quickly, the problem was that it was not selected in the market. Last year, Lotte e-commerce transactions amounted to 7.6 trillion won, a mere 7% increase from the previous year before the launch of Lotte On. It is far behind the growth of the overall online shopping market (19%). This is comparable to that of rival Shinsegae Group’s integrated mall’SSG.com’, which has grown 37% over the same period.
A retail industry official said, “Especially last year, e-commerce shopping exploded due to Corona 19. As other companies have reduced their deficit and the amount of transactions has increased significantly, the low figure of Lotte On will have been further highlighted.”
The predicted hardiness? “Recruiting outside experts to normalize”
Even when Chairman Shin said at the president’s meeting at the beginning of the year, “The reason why there are sluggish business groups even though they started out first in the industry is not a strategy, but a matter of execution.” Lotte.com, the predecessor of Lotte On, was launched in 1996. It was a leader in domestic online malls.
In addition, Chairman Shin has emphasized on-line integration more than anyone else. It was also called an’omni-channel’ evangelist that combines channels so that consumers can search and purchase products across various channels such as online, offline, and mobile. This is why Lotte On’s shoulders, which united seven affiliates including mart, department store, supermarket, and home shopping, were heavy.
However, the industry pointed out that the Lotte On User Interface (UI) did not seamlessly connect the conversion of product purchases by affiliates, and that it lacked a differentiation strategy such as SSG.com with early morning delivery and shopping. It is also interpreted that the fact that the representative resigns after a year after its inauguration has a strong personality reflecting the judgment of the highest ranks.
Lotte hires outside experts to serve as the head of the e-commerce business. It seems that it is judged that only internal talents are insufficient to implement Lotte’s own differentiated strategy and strengthen the integration of affiliates. It is known that employees who have already been scouted from other e-commerce such as Coupang are working at various important positions in Lotte On.
Lotte said, “Head of the business division Cho has announced his intention to resign to the company for personal reasons such as deteriorating health,” and said, “We will soon recruit experts from outside who can renew the organizational atmosphere and bring Lotte On to normalization.” .
Maeng Ha-kyung reporter [email protected]
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