Lotte Department'S "Disgrace" Retail Market

The South Korean department store, which has studied from Japan, has experienced a rise from 1997 to 2003. But since 2014, the Korean department store has suffered the double impact of the electricity supplier and the shopping center again.

Sales decline, close shop, evacuate...

The Korean department store industry looks grim.

Nowadays, close shop has almost become a nightmare that department stores can not escape.

Many factors, such as the impact of electricity suppliers and rents, have led to a surge in retail stores.

What kind of business logic is hidden behind the tide of the department store? Is the cold winter of the department store coming?

The loss situation is not only Lotte Department store, but also the Lotte Mart supermarket of Lotte Group in Korea. In the Chinese market, there has been an acclimatization of customers.

Data showed that the weakness of the supermarket business led to a sharp fall of 87.2% to 6 billion won in the three quarter of last year.

The loss increased to 35 billion won.

The international market of supermarket business is mainly concentrated in China. There are 116 Lotte Mart stores in China, including 5 closed in the three quarter, an increase of 1, a net decrease of 4.

Meanwhile, financial data showed that Lotte Department's net profit plunged 90.8% in the two quarter of last year, down from 280 billion won to 26 billion won in the same period last year.

As of the end of September, the three quarter of Lotte Department Store Sales recorded an increase of 6.9% to 77190 billion won.

However, the increase in revenue is mainly driven by financial and pharmaceutical businesses, and the core department stores and supermarkets' retail business growth is below average.

Back in October 19, 2009, Lotte's Department announced that it had 72.3% of the time supermarket owned by the Fang Keng family, and that it would buy up to $630 million for 27.7% of the other minority shareholders.

Such acquisitions are not unfamiliar. Most Korean businesses choose to enter the Chinese market through joint ventures or acquisitions.

However, in the industry view, Lotte Department's acquisition decision is not wise.

Fang Keng's offer is not less than HK $5 per share, but its price is only HK $4.64 on the day of acquisition.

At the same time, time supermarket for various reasons, before the sale of shares is a mess, the company in the first half of 2009 net profit of 77 million 540 thousand yuan, compared with the same period of 89 million 300 thousand yuan 13%, during which also lost 4 closed supermarkets.

And in the same day

It seems that the operating performance of the times supermarket has been declining one after another, but it is foreshadowing for Lotte Department's reception.

However, China, which has huge market potential, did not let Lotte Department store like a duck to water. Instead, it sent out frequent news of its loss or even its closure.

Meanwhile, some small and medium-sized department stores began to fail in some parts of China, and large department stores joined in the collapse.

The latest data show that since 2014, the number of large department stores has clearly closed to 38 stores. In June 2015, Wanda Department stores, which ranked first in the department store industry, also began to make major adjustments, and planned to reduce stores to 50 stores.

Wu Qing, a researcher at the State Council Development Research Center, thinks that

Sales volume squeezed sales of physical stores.

At the same time, Huang Yingbo, senior director of the Commercial Services Department of the central business district, told reporters that in the past few years, 8 of the 10 most widely built shopping centers in China were located in China, and there will be a large number of shopping centres in the coming 2016 to 2019.

In addition to the first tier cities, some two or three tier cities have also begun to exert pressure on the retail market because of the large number of new supply.

In addition, the lack of systematic urban planning often leads to a series of serious problems.

The excessive reliance of some local governments on land revenue causes the government not to cooperate in the short term land supply rhythm and long-term regional planning and development.

In areas where public pport facilities are not perfect and residential communities are not yet mature, excessive and premature commercial land supply and project development often result in a dissatisfactory flow of new built shopping centers.

Huang Yingbo mentioned.