Shinsegae 'Landers Day'... Company-wide Marketing
Lotte Expands Investment... Better Baseball Means Higher Sales
Distribution rivals Lotte and Shinsegae are engaging in 'off-field competition' timed with the baseball season opener. Both companies are aiming for synergy effects between baseball and their core distribution businesses.
According to industry sources on the 2nd, Shinsegae Group has been holding the largest shopping festival of the first half of the year, 'Landers Day,' for a week starting from the previous day. Landers Day is a baseball-themed shopping event that began in 2021, the year Shinsegae acquired the SSG Landers baseball team. The company explains that it starts every year in line with the professional baseball season opener and serves as a 'link' between distribution and sports within the group.
Shinsegae Group expects synergy with its core business through Landers Day. During this period, Shinsegae affiliates offer massive discounts not only on goods such as SSG Landers uniforms but also on general merchandise. In 2022, when Landers won the integrated championship, the affiliates held extraordinary discount events. A Shinsegae representative said, "When Landers wins, there is a perception that benefits also reach general consumers, so even people who do not follow baseball support Landers, creating a virtuous cycle that leads to sales."
However, the baseball team's performance is considered below par compared to previous years. After winning the integrated championship in 2022, SSG Landers fell to third place last year. Although it is still early in the season this year, they stand fourth with 5 wins and 3 losses in 8 games. This is interpreted as a result of reduced investment. Shinsegae Group's parent company, E-Mart, posted its first-ever loss last year since its founding. Due to poor performance, the baseball team's player operation expenses shrank from 47 billion KRW to 29.4 billion KRW, and promotional expenses also decreased from 2.188 billion KRW to 1.886 billion KRW.
Lotte has increased its investment in baseball. According to the audit report of Lotte Giants, Lotte Group's professional baseball team, player operation expenses rose from 26.2 billion KRW to 28.9 billion KRW. Business expenses for stadium infrastructure improvements and promotional expenses also increased from 1.78 billion KRW to 1.892 billion KRW and from 900 million KRW to 1.1 billion KRW, respectively.
Lotte's expansion of investment in the baseball team stems from the experience that improved performance of the Lotte Giants leads to increased company sales. A Lotte representative said, "When the Lotte Giants perform well, company products, including alcoholic beverages, generally sell better," adding, "Within the group, there is an atmosphere every year hoping 'only that baseball does well' for this reason."
According to the Financial Supervisory Service's electronic disclosure system, when the Lotte Giants advanced to the playoffs in 2011 and 2012, the sales of group affiliates actually showed an upward trend. For Lotte Chilsung, sales in 2011 and 2012 were 1.5643 trillion KRW and 2.0157 trillion KRW, respectively, marking increases of 20.6% and 28.8% compared to the previous year. Lotte Shopping, a core part of the distribution sector, also saw sales rise to 15.1817 trillion KRW and 16.1218 trillion KRW during the same period, up 13.7% and 6.1% year-on-year, respectively.
However, the Lotte Giants have repeatedly missed the postseason since 2017. Last year, the group signaled change by appointing Lee Kang-hoon, a marketing expert, as the CEO of Lotte Giants during the pre-season group personnel reshuffle, but the team finished in 7th place. This year, the 'master' Kim Tae-hyung took the helm, and Park Jun-hyuk was appointed as the new general manager, but results have yet to appear. The Lotte Giants are barely avoiding last place this season with a 1 win and 6 losses record.
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