"Survive by Uniting on Mobile" ... Retail Industry Accelerates Digital Transformation

CJ O Shopping Launches Integrated Brand 'CJ OnStyle'
GS Retail-GS Home Shopping Maximize Merger Synergy

[Asia Economy Reporter Jo In-kyung] As the online shopping market, including mobile and internet, rapidly grows, the distribution industry is rushing to integrate online and offline shopping channels.

According to industry sources on the 2nd, CJ O Shopping will launch a new integrated brand, 'CJ ONSTYLE,' combining TV home shopping, the internet shopping mall (CJmall), and T-commerce (CJ O Shopping Plus) starting from the 10th. The company aims to strengthen its rapidly growing live commerce business and foster specialized malls for fashion, living, and beauty, shifting the business focus from traditional TV home shopping to mobile.

Heo Min-ho, CEO of CJ ENM Commerce Division, explained, "We will pioneer a new market beyond the mature TV home shopping market in line with the media environment where the boundaries between TV and mobile are disappearing."

GS Retail and GS Home Shopping are also accelerating digital transformation in preparation for their merger in July. By combining GS Retail's strength in offline channels with GS Home Shopping's online commerce capabilities, they plan to gain a competitive edge in the increasingly fierce distribution market.

The two companies have set a goal to invest 1 trillion won in digital sectors over the next five years and increase the current transaction volume of 1.3 trillion won more than fourfold to 5.8 trillion won. Ahead of the merger, they began pilot operation of the integrated online platform 'Marketfo' last month.

Lotte Shopping, after its 'Lotte ON' launched in April last year failed to meet expectations, recently recruited Na Young-ho, former head of strategic planning at eBay Korea, to lead the business. The business leadership position was also elevated from executive director to vice president level to strengthen its power. Lotte ON is an online mall integrating seven shopping malls including Lotte Mart, Lotte Super, Lotte.com, LOHB's, Lotte Home Shopping, and Hi-Mart.

Lotte Shopping is also actively strengthening its e-commerce business by investing in acquiring shares of the secondhand trading platform 'Joonggonara' and actively participating in the ongoing acquisition battle for eBay Korea.

The reason distribution companies are integrating shopping channels like this is that they judged a mobile-centered business restructuring is necessary amid the rapid growth of the online shopping market.

According to Statistics Korea's online shopping trends, the domestic online shopping market exceeded 113 trillion won in 2018, then grew to 137 trillion won in 2019 and 159 trillion won in 2020. Among these, the mobile shopping market increased from 69 trillion won to 108 trillion won, with its share rising from 61.1% to 67.9%.

In the case of TV home shopping, the live commerce market, which is a mobile version of traditional TV broadcasting, is also expanding. The live commerce market, which was worth 400 billion won last year, is expected to grow to 2.8 trillion won this year.