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SSG.com, the ecommerce unit of South Korea’s retail conglomerate, Shinsegae, launches early morning delivery service in June.
Coupang’s revenue for 2018 hits KRW 4.42tn (US$ 3.5bn), a new record for Korea’s ecommerce market.
The retailer’s revenue grew by 65% over 2018, an impressive leap from 40% growth in the previous year. Its losses also jumpred to KRW 1.1tn last year from KRW 638.8 bn in 2017. The eight-year-old retailer has lost money every year and will continue to invest aggressively in the coming years. Softbank Vision Fund invested US$ 2bn in the company in November last year.
Coupang doubled the number of warehouses to 24 and hired 24,000 more employees. Its fast delivery service called “Rocket Delivery” can now send up to five million products within 24 hours, an increase from two million products in 2017.
Coupang’s CEO Kim Bom said, “We will continue to invest aggressively in technology and infrastructure until the day customers ask themselves, ‘How did we live without Coupang?’ ”
Keep up-to-date with the latest retail developments from Asia.
Customers at select GS25 convenience stores in South Korea will be able to charge shared electric bicycles from June.
GS Retail's convenience chain, GS25, is setting up charging facilities for 800 electric bicycles in partnership with GoGoSing at its stores. The service will be made available in Gangnam District in Seoul and Pangyo in Gyeonggi Province.
Customers will be able to use an electric kickboard, charge, exchange and return batteries to a nearby GS25 store. With competition in the convenience channel in South Korea fierce, GS25 is exploring ways to attract new customers, offering new services in addition to selling products in-store. GS Retail has already introduced charging facilities for electric vehicles at 45 locations, and is now beginning to offer delivery services for convenience store products in partnership with the delivery app Yogiyo.
Rossmann, the German drugstore part owned by A.S. Watson, will begin selling products in South Korea in May, with products shipped directly from Germany.
Rossmann plans to make “full-scale inroads into the domestic health and beauty market” of South Korea. A direct-to-market business model will be adopted, rather than stocking goods in stores. It is not clear when Rossmann will open its physical stores in the country.
“The direct market plans to provide stable services to consumers by establishing a faster logistics system and organisation through a direct-market platform linked to its headquarters in Germany, while expanding the range of choices by handling healthcare and lifestyle products needed for all ages, as opposed to existing local drugstores’ focus on beauty products,” reported Korea Bizwire.
The brand’s marketing plan includes quiz events on its social media platforms until the 8th of April, and prizes including Starbucks coupons and Rossman Korea goods for winners.
Rossmann is 40% owned by A.S. Watson. The company was established in 1972, with 2,100 stores in Germany and 3,930 stores in Europe. The reason why Watson chose its German brand to enter South Korea is because “Korean consumers were a match with the company’s meticulousness and strictness on their products, where both parties value safe, good quality products offered at reasonable prices”, according to Korea Bizwire.
A.S. Watson entered South Korea with its well-known Watson brand before. It sold its stake to convenience store retailer, GS Retail, in 2018. Since then, GS Retail rebranded all Watson stores to ‘Lalavla’.
The Hong Kong headquartered company is expanding its international network rapidly, currently opening a new store every seven hours and just opened its 15,000th store in Malaysia in March.
South Korea’s food manufacturing conglomerate Daesang Group is to sell its remaining stake in the convenience store chain, Ministop Korea, to its Japanese partner Aeon.
Daesang and Aeon are finalising the terms of the deal, which is estimated at US$80m. Both parties aim to complete the sale within March.
Aeon currently owns 76.06% Ministop Korea, Daesang 20% and Japan’s Mitsubishi the remaining 3.94%. Aeon’s ownership would reach 96.06% after Daesang entirely exits from the convenience store industry.
Daesang formed Ministop Korea with Aeon Group in 1997. It sold 55% stake plus management right to Aeon Group in 2003. Aeon Group had attempted to sell Ministop Korea in 2018. The sale process was suspended in January 2019 due to the disagreement over the sale price with shortlisted contenders including two Korean retail giants Lotte Group and Shinsegae Group.
Ministop is South Korea’s fifth largest convenience store chain, with over 2,500 stores. CU operates 14,903 stores, GS25 14,900, Lotte 10,331 7-Eleven stores and Shinsegae 3,152 Emart24 stores.
Its performance has been deteriorating and suffered large profit decline (down by 23% year-on-year in 2017) due to fierce local competition and heavy royalties paid to Aeon.
Driven by an increase of single-member and two-people households, the number of convenience stores in South Korea has risen sharply in recent years. To curb excessive competition, South Korea’s FTC (Fair Trade Commission) approved a set of voluntary rules in December 2018 to ease saturation and prevent reckless new openings.
This in-depth guide to South Korea explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.
Five year growth forecasts for the grocery market, the leading retailers and modern trade grocery channels in South Korea.