Lotte Mart Partners with Sports Industry's IKEA 'Decathlon' to Operate Urban Stores

Lotte Mart Gimpo Airport Branch Decathlon Store View. (Photo by Lotte Mart)

[Asia Economy Reporter Seungjin Lee] Lotte Mart's sports stores are undergoing a transformation.

Sales in Lotte Mart's sports product category have shown double-digit growth annually, driven by the popularity of key items such as hiking, camping, and bicycles. Especially this year, due to the COVID-19 pandemic, home training and outdoor activities have increased, resulting in a high growth rate of 47.2% through September.

Accordingly, Lotte Mart has selected 'cost-effectiveness', 'emotional value', and 'lifestyle sports' as the key strategies for operating its sports product category and has begun searching for tenant companies. Since May, it has started negotiations with Decathlon, known as the IKEA of the sports world.

Decathlon is a French multi-brand sports retailer that opened its first store in 1976 and currently operates over 1,600 stores in 57 countries as of 2020. It runs the second-largest sports research center in Europe, enabling product planning and manufacturing to provide high-quality sports products at reasonable prices. The average size of Decathlon stores worldwide ranges from 1,652㎡ to 3,305㎡ (500 to 1,000 pyeong), carrying about 4,000 products.

Through a strategic partnership with Decathlon, Lotte Mart plans to operate 'urban compact' stores of approximately 330㎡ (100 pyeong), pricing products about 40% lower than the manufacturer's own brand products. This strategy aims to improve customer accessibility and create stores where the trendiest sports goods can be purchased at the most reasonable prices.

Looking at sports goods sales in large supermarkets, seasonal key product categories lead overall sales. For example, in July, swimwear sales account for more than 30% of total sports goods sales; in August, camping-related sales make up 40%; and in September, hiking-related sales account for about 29%.

Therefore, Lotte Mart's Decathlon stores plan to select about 200 best-selling products and change some items every two weeks, focusing on the trendiest sports goods. Lotte Mart will sequentially open stores at Jamsil, Guri, Cheongnyang, and Gimpo Airport locations in September, and open a store at Gwanggyo in October, aiming to operate more than 30 Decathlon stores in 2021.

Kim Injun, Lotte Mart's Sports MD (Merchandiser), said, "Through Decathlon, the IKEA of the sports world and a SPA brand, we will offer trendy products at reasonable prices," adding, "We will strive to help customers enjoy a healthy sports life in the changed daily life after COVID-19."