Lotte prepare e-commerce department launching this week

South Korean retailer Lotte will launch a new department in charge of the business group’s online businesses this week.

The move is part of a plan to speed up efforts to cope with the rapid expansion of the country’s online market.

Earlier in May, Lotte unveiled the plan to inject 3 trillion won (US$2.69 billion) into its e-commerce business over the next five years, integrating online malls that have been separately operated by its affiliates into one with an aim to generate 20 trillion won in sales by 2022.

The new e-commerce department, set to launch Wednesday, August 1, will be responsible for a new platform that encompasses seven of the business group’s retail subsidiaries, including the department store business and discount store chain.

With some 1400 employees, the new branch aims to roll out a mobile app in 2020 and plans to hire 400 additional workers by next year.

“The new app will become a platform that provides optimised services based on our massive customer data,” Kim Kyoung-ho, who will lead the new organisation, said, noting that nearly 22 million customers are using Lotte online every month.

Sales of 13 major online stores and marketplaces jumped 17.2 per cent on-year in May, according to government data.

Online malls reported a 21.3 per cent spike in sales as more people opted to do their grocery shopping online. Online marketplaces, where product or service information is provided by multiple third parties, reported a 12.4 per cent surge in sales.

Meanwhile, Lotte Duty Free, the conglomerate’s duty-free unit, said it will ramp up marketing efforts for its online, downtown and overseas businesses, as part of its operations at Incheon International Airport, west of Seoul, will be shut down at 8pm tomorrow night.

The duty-free operator decided to return three of its four money-losing concessions at the country’s main gateway in February. The zones were reorganised into two and went to Shinsegae DF in the follow-up bidding last month.

Lotte said it expects to save up to 1.4 trillion won of rent by 2020 following the closure of the airport duty-free business.