South Korean large supermarkets respond to fresh food competition with Chinese e-commerce

Following Korean e-commerce sites such as Coupang, Chinese e-commerce sites such as AliExpress are also expanding sales of fresh foods. As a result, large Korean supermarkets such as Lotte Mart and E-Mart
Supermarkets are responding by reinforcing business integration and pricing strategies. For South Korea's large marts, fresh food is a core competitiveness that they have been focusing on, so there has been no sense of crisis until now.
It's bigger than that. First, while accelerating the integration of offline businesses to improve profitability, the company is also focusing its efforts on raising the competitiveness of the fresh produce sector.
According to the South Korean distribution industry on the 10th, Lotte Mart announced plans to strengthen its grocery division, including fresh foods, in January of this year.
A reorganization was carried out. The Product Division, which was in charge of food and non-food products, was consolidated into the Food Products Division, which focuses on food products, and non-food products were integrated into the Mall Business Division.
A company official said, ``While we are strengthening the food department, which is the competitive strength of large marts, we are also strengthening non-food products.
"We will create a content space that is differentiated and specialized, emphasizing the strengths of offline stores," he said, explaining the purpose of the organizational change.
Organizational integration work between marts and supermarkets (small supermarkets) has taken a step forward.
is. Following last year's integration of the upper divisional organizations, this year the teams were also unified. For example, the livestock teams that existed at marts and supermarkets were integrated into one team.
It was. Last year, the company improved its business efficiency based on integrated sourcing between marts and supermarkets, and achieved significant improvement in business performance. According to Korean business standards, Mart's operating profit last year was 47.2 billion won (
Approximately 5.2 billion yen). This has increased by about 2.2 times from 2022 (21.2 billion won), and supermarkets have turned from a deficit of 5.5 billion won to a surplus of 25.6 billion won.
This year, teams have been integrated, and the organizational integration work has virtually come to a halt. Gaining further impetus to reduce costs and improve profitability
It is expected to be. E-Mart focused on ensuring price competitiveness comparable to e-commerce. Starting in January of this year, we will be holding a monthly “lowest price” event, selling fresh and processed foods and
We sell food at up to 50% cheaper than normal prices. Last month, we launched the "Kakaku Gyakusho" project, in which we offer more than 50 food and daily necessities products at ultra-low prices on a monthly basis.
It ignited a competition. The company explained that by purchasing fresh foods such as agricultural products directly from the production area, it has minimized the distribution stage and significantly lowered selling prices.
Ensuring product and price competitiveness is also a core growth strategy advocated by Han Chae-yang, the company's CEO who took office last September. Han's fee
Since taking office, Omote has focused his efforts on integrating three offline distribution companies, including E-Mart, small supermarket chain E-Mart Everyday, and convenience store chain E-Mart 24.
In December of last year, a new integration promotion office was established, and the company's product divisions, which had been separated by company, were consolidated into one. This will enable all infrastructure, from product procurement to logistics, to be
Integrate and maximize synergies. In particular, coupled with the promotion of Chairman Jeong Yong-jin, who has emphasized the competitiveness of offline core businesses, E-Mart will strengthen its product and price competitiveness.
The strategy is expected to increase in depth and breadth. In order to enhance its expertise in fresh foods, Homeplus has established a fresh foods MD (product planning) team in the fresh foods headquarters under the product division under the direct control of the department head.
It was organized into This team will be involved in product development, trading, and product safety for agricultural, livestock, and marine products, and will play a role in strengthening the cooperative system between large marts and supermarkets.