[Trivia] Shinsegae Vs Lotte in Busan

2009 Feb. 12

Shinsegae to Fight Lotte in Busan
By Kim Hyun-cheol, Staff Reporter koreatimes

Shinsegae is opening an upscale shopping mall in Busan, the stronghold of rival Lotte, setting up for the two retail giants' newest battle.

Shinsegae will launch a multiplex shopping center in Busan's Centum City commercial district in the Haeundae district. Shinsegae is the leader of "discount'' chain networks, while Lotte is the stronger department store chain.

In the two-stage project to build the nation's largest multiplex shopping mall, Shinsegae will inject a total of 1 trillion won into an aggregate floor space of 284,400 square meters. The first-stage, estimated to cost 600 billion won, will be complete next month and feature a multiplex cinema, golf driving range and a shopping mall with 600 brands in 21 shops.

Shinsegae and the Busan city government expect the new shopping mall to draw over 50,000 customers daily.

Lotte runs a department store on the site where the new Shinsegae mall venue will be opened. The Lotte mall in Busan, which opened in December 2007, recorded 207 billion won in sales.

In an interesting twist, the Shinsegae mall will accommodate the Chanel brand, which pulled out of Lotte's main outlets, dissatisfied with Lotte's decision to downsize Chanel due to a slide in sales.

Lotte appears to be taking the whole situation "personally,'' as it views the Shinsegae's new mall as a foray into its home base.

Three out of the four department stores in Busan are Lotte's. Its Seomyeon store is in fourth place in terms of sales among all the Korean department stores.

"We enjoy strong customer loyalty in Busan" said Kwon Kyung-ryul, chief of Lotte's Centum City mall. "Construction alone takes four years. That timeline is separate from the period needed to build customer loyalty."

Shinsegae, the latecomer, is determined to push for a strong presence in Busan, aiming to make its Busan ahead in sales over its mall in Gangnam, Seoul. Shinsegae's Gangnam store is second nationwide in sales behind Lotte's store in downtown Seoul.




hckim@koreatimes.co.kr