Struggling retail reports a solid 2020 on pivot to online
The retail apocalypse is upon us, as stores shut by the dozen and empty storefronts haunt the shopping districts, and yet the revenue of retailers was up in 2020.
According to the Ministry of Trade, Industry and Energy on Thursday, that number increased 5.5 percent.
The growth was online, with the totals up 18.4 percent year-on-year. Offline sales at conventional stores, including department stores and discount marts, fell 3.6 percent.
Online sales now account for 46.5 percent of all retail revenue, which is up from 41.2 percent the previous year. Conventional retailer revenue now accounts for 53.5 percent the total, a drop from 58.8 percent in 2019.
Online retailers not only include Coupang, WeMakePrice, 11st, Gmarket and Auction but also those run by offline retailers such as Shinsegae and Lotte.
Among conventional retailers, department stores suffered the most, with revenue dropping nearly 10 percent, while major discount mart revenue was down 3 percent and that generated by supermarkets run by corporations down 4.8 percent.
Among conventional retailers, only convenience stores did well, with revenue up 2.4 percent.
The difference was more evident in December, when the government’s stricter social distancing was implemented as the number of people infected with the coronavirus spiked to around 1,000 daily cases.
Revenue made by major online malls in the last month of 2020 surged 27.2 percent. Offline sales fell 4.4 percent year-on-year.
With more people at home, purchases of electronic home appliances in December rose 25.6 percent.
Fashion, sports and toy sales dropped. Fashion and clothing fell 17.7 percent, while sports and toy sales declined 3.8 percent.
“As the social distancing is extended, people have been refraining from going out, and even if they do, they avoid places where there’s a crowd,” said Kim Ho-sung, head of the ministry’s distribution and logistics division. “[The increase in online sales] is the result of a consumer culture that emphasize immediacy.”
With sales hit, retailers have been closing stores and laying off employees while redirecting the focus toward online.
Lotte Shopping last year closed 114 branches including a department store, 12 discount marts and 74 supermarkets.
It also closed 27 LOHBs health and beauty stores.
Lotte Shopping may close 60 more locations.
Emart has shut down all six of its Pierrot Shopping stores, while announcing the enhancing of SSG.com.
BY LEE HO-JEONG [email@example.com]