Homeplus outlines online strategy
It is seeking to stand out in the current challenging market and increase its sales from the 600 billion won ($508 million) posted last year to 1 trillion won for this year and 2.3 trillion won by 2021.
The third largest hypermarket chain operator in Korea said during a press event Thursday that it will equip all of its 140 branches across Korea with online distribution capabilities to realize its initiative, with a two-year deadline for completion set.
The branches will serve both as offline stores and online delivery service centers for customers.
Homeplus will also increase the number of delivery order pickers from the current 1,400 workers to 4,000 while, adding around 2,000 additional loading trucks to fulfill more than 120,000 delivery orders per day. Many of its current workers will be repositioned within the company for the initiative.
The retail market has been struggling in recent years as the fast rising minimum wage and rents as well as the tendency for consumers to shop online have dimmed the profits for retail operators.
“We will surpass the boundaries of online and offline to become an all-line player,” said Homeplus CEO Lim Il-soon. “We are trying to build a sustainable and efficient business model centered on our customers.”
Lim added that Homeplus is not considering aggressive promotions for its products, like Coupang, as the strategy is “indiscrete” and “not a feasible long-term strategy.”
Also as a means to boost its sales, Homeplus will expand the number of Homeplus Special stores, which combine the prices of bulk discount warehouse retailers with a conventional grocery store experience, from the current 16 to 30 by the end of the year and up to 80 by 2021.
Homeplus is betting big on the Special stores to aiding the retail operator’s online initiative, as the 16 stores have achieved an average of 12 percent more in sales compared to non-Special Homeplus stores.
The Special stores will also play a part in supplying products for Homeplus to fulfill same-day delivery orders, as their inventory is used for “the Club” online shopping mall, which opened Thursday.
BY KO JUN-TAE [email@example.com]
More in Industry
Sale of Doosan Infracore stake could be opportunity for Hyundai Heavy
Volvo XC60 ranks No. 1 for residual value in Encar study
Binggrae to scoop up ice cream competitor after FTC approves merger
LG accepting orders for rollable, $85K television
Shinsegae Group chair passes down shares to children