How Does Lotte Shopping Company Work?

Lotte Shopping operates several key retail formats to serve its customer base. These include Lotte Department Store for fashion and luxury, Lotte Mart as a hypermarket chain, and Lotte Super focusing on fresh food and daily necessities.

The company actively integrates its operations with its online platform, Lotte ON, launched in April 2020. This digital presence aims to complement its offline stores, offering specialized departments and personalized experiences.

Lotte Mart is evolving by emphasizing fresh food and grocery items, introducing specialized stores like Zettaplex and Bottle Bunker. Lotte Super focuses on local market needs, curating product lineups and increasing offerings of eco-friendly and smaller-sized fresh food options.

A key differentiator is Lotte Shopping's comprehensive omnichannel strategy, seamlessly integrating online and offline channels. This includes services like smart shopping and online-to-offline pick-up options, enhancing convenience and customer engagement.

Lotte Shopping has prioritized international expansion, notably in Southeast Asia. Lotte Mall West Lake Hanoi, opened in 2023, achieved significant success with 10 million visitors and KRW 280 billion in sales within its first year.

To counter declining domestic demand, the company is renovating major department stores and investing in shopping malls. This strategy aims to shift the sales composition, with a target for shopping malls to contribute 30% of total revenue by 2030, up from 1%.

Leveraging AI is a core part of Lotte Shopping's strategy to enhance customer experience and operational efficiency. This includes AI interpretation services for tourists and AI sorting systems for quality control in its hypermarkets and supermarkets.

The company operates Korea's largest department store chain and the second-largest hypermarket chain. This diverse retail footprint, combined with its membership service, forms a significant part of its competitive edge.

As of January 2025, Lotte Shopping leads the South Korean department store market with a substantial 34.8% market share across its 31 branches. While competitors are gaining ground, its established presence remains strong. The company also extends its operations internationally, with a notable presence in countries such as Vietnam, Indonesia, and Russia, showcasing its global reach and diverse revenue streams.

The South Korean retail sector faces considerable headwinds, including intense competition from both domestic and international players, and the accelerating growth of e-commerce. Online sales in South Korea saw a significant 13% year-on-year increase in May 2025. Economic uncertainties are also projected to slow overall retail market growth to a modest 0.4% in 2025, with department store sales specifically anticipated to decline by approximately 1.7% in the same year.

To bolster its financial performance and market standing, Lotte Shopping is implementing a robust strategy focused on expanding overseas operations, particularly in Southeast Asia. Domestically, the company is revitalizing its core department stores and integrating its hypermarket and supermarket divisions. These efforts are part of a broader plan to double operating profit to KRW 1 trillion by 2026, targeting KRW 17 trillion in sales, with a long-term ambition of reaching KRW 20 trillion in sales by 2030. This aligns with the Growth Strategy of Lotte Shopping.

The company is actively investing in new technologies and business models to adapt to evolving consumer behaviors and market dynamics. This includes leveraging AI and data for personalized advertising through an integrated media platform and establishing a generative AI promotion team. To strengthen its e-commerce capabilities, Lotte Shopping plans to construct six customer fulfillment centers. The strategic focus on food sales within hypermarkets, which constituted 69.9% of total sales in that segment by September 2024, reflects an adaptation to consumer preferences for essential goods.