Lotte Mart Introduces 1-Hour Delivery Service at 14 Stores in Vietnam

[Asia Economy Reporter Seungjin Lee] Lotte Mart Vietnam Corporation is strengthening its competitiveness in ready-to-eat and fresh food products by utilizing the '1-hour delivery service.'

On the 28th, Lotte Mart announced that it plans to implement the 1-hour delivery service at all 14 branches in Vietnam this year in partnership with Grab, Southeast Asia's largest ride-sharing company. Since December 2018, Lotte Mart has been operating the 1-hour delivery service using Grab's motorcycle delivery service, 'Grab Express,' at a total of nine stores in Ho Chi Minh City, Hanoi, and other locations.

Lotte Mart believes that in tropical regions where fresh product delivery is challenging, guaranteeing hygiene with fast delivery times can provide differentiated competitiveness. Through this, Lotte Mart aims to increase the mobile sales composition ratio of fresh and grocery products from the current 2% range to 9% by 2022.

Additionally, Lotte Mart plans to expand its cooperation model with Grab. Lotte Mart's delicatessen products will be sold on 'Grab Mart,' operated by Grab. Lotte Mart has previously grown popular menu items such as raw fish and sushi, which are rarely found in Vietnam. They plan to strengthen competitiveness by improving cooling packs and packaging to enable refrigerated product delivery for items like raw fish and sushi.

Furthermore, since December 2017, Lotte Mart has been providing delivery services linked with offline stores through an application called 'Speed L' in Vietnam. 'Speed L' is a mobile shopping mall operated by Lotte Mart that delivers ordered products within 3 hours within a 15 km radius.

Since its full-scale operation starting in 2018, 'Speed L' has shown sales growth of 202.6% in 2019 and 74.8% cumulatively as of April 2020, with sales increasing more than fivefold over three years. Accordingly, Lotte Mart is making various efforts to grow 'Speed L.'

Meanwhile, Lotte Mart was the first domestic retailer to enter Vietnam and currently operates 14 stores. In the first quarter of 2020, Lotte Mart Vietnam's sales increased by 10.7% compared to the same period last year, and operating profit also rose by 7.2%.

Lee Hak-jae, head of Lotte Mart's Overseas Business Division, said, “To expand mobile delivery based on stores, we plan to increase the dedicated packing space behind the stores and triple the order processing capacity by 2022.” He added, “We will do our best to enhance Lotte Mart's value as an innovative retailer in the Vietnamese market.”