Lotte Department Store Invests 7 Trillion Won in Shopping Mall Business... Junho Jeong's Bold Move with Time Villas

Driving Mid-to-Long-Term Growth with Time Villas
Expanded to 13 Domestic Shopping Malls... Achieved 6.6 Trillion KRW in Sales
Aggressive Expansion into Southeast Asian Market with Mid-to-Long-Term Plans

Lotte Department Store will invest 7 trillion won in the shopping mall business by 2030. As department stores and outlets, which have driven growth so far, slow down, the company aims to make future-oriented shopping malls a new growth engine.

According to Lotte Shopping on the 24th, Jung Jun-ho, CEO of Lotte Department Store, said at a mid-to-long-term strategy briefing held at Lotte Hotel in Jung-gu, Seoul, the day before, "Shopping malls will become the mainstay of the domestic retail business in the future," adding, "We will invest 7 trillion won in the shopping mall business and increase the number of domestic shopping malls to 13 by 2030." He also added, "The new complex shopping mall 'Time Villas' by Lotte Department Store, first unveiled in May this year, is the core of the strategy," and "It will become the standard of future-oriented retail that all distributors will aspire to."

CEO Jung cited retail trends in Japan and Korea as the background for making shopping malls a new growth engine. He said, "Since 1990, shopping malls have driven growth in the Japanese retail market," and "Korea is also expected to have shopping malls lead growth in the future." According to Lotte Department Store's analysis and forecast, domestic department stores are expected to grow by only 2% annually until 2030, while shopping malls are projected to record a 17% growth rate.

At a press conference held on the 23rd at Lotte Hotel in Jung-gu, Seoul, Jung Junho, CEO of Lotte Department Store, explained the shopping mall business strategy of Lotte Department Store.
[Photo by Lotte Department Store]

The success of Lotte World Mall and Lotte Mall West Lake Hanoi has also become a gauge for expanding the shopping mall business. Opened in 2014, World Lotte Mall has achieved a high growth rate of 25% annually since Lotte Department Store began operating it in 2021 by attracting K-fashion, global F&B, pop-ups, and more. Additionally, Lotte Mall West Lake Hanoi in Vietnam, which attracted 10 million cumulative visitors last month, surpassed 100 billion won in sales just four months after opening.

CEO Jung said, "We captured the potential of shopping malls at Lotte World Mall and Lotte Mall West Lake Hanoi and reestablished our strategy," adding, "Time Villas Suwon is the first result of the future-oriented shopping mall business that will be fully launched." Time Villas is Lotte Department Store's new complex shopping mall brand, and the first store, Time Villas Suwon, opened last May after a major renewal that changed 70% of the existing area. CEO Jung said, "After converting to Time Villas Suwon, sales from new customers increased by more than 40% compared to the previous year, and sales from metropolitan customers outside Suwon also expanded by more than 20%," adding, "Sales per premium customer at AvenueL increased by nearly 90%."

CEO Jung announced plans to expand Time Villas nationwide based on the success of 'Time Villas Suwon.' He said, "By 2030, we will build new shopping malls in Songdo, Suseong, Sangam, and Jeonju, and renovate seven existing outlets in Gunsan, Suwan, Dongbusan, Gimhae, and others to convert them into shopping malls." He also said, "Overseas, based on the successful model of Lotte Mall West Lake Hanoi, we plan to promote the shopping mall business in various ways, including new openings and consignment operations."

CEO Jung cited three differentiation strategies to survive shopping mall competition with rivals such as Shinsegae Group and Hyundai Department Store Group: 'accessibility,' 'variety,' and 'prestige.' He said, "We will secure overwhelming accessibility by developing shopping malls in the centers of commercial and business districts developed through large-scale local government projects," citing Songdo International Business District and Daegu Suseong Alpha City as representative examples. He also said, "We plan to develop 'multi-complexes' that combine shopping, entertainment, accommodation, residence, office, and art content by linking with Lotte Group's assets."

The exterior of Time Villas will be created as an architectural landmark through collaboration with world-renowned architects. CEO Jung said, "In Songdo and Sangam, we are collaborating with Richard Meier, a Pritzker Prize-winning architect often called the Nobel Prize of architecture, to create a complex combining shopping malls, resorts, and officetels," adding, "In Daegu Suseong, we plan to apply the 'In&Outdoor' concept in partnership with LDA, a famous British shopping mall design firm."

With these differentiation strategies, Lotte Department Store has set a vision to achieve 6.6 trillion won in sales from the shopping mall business by 2030. CEO Jung stated, "We will raise the proportion of shopping mall sales in Lotte Department Store from the current level of about 1% to up to 30%, and also achieve a majority share of the domestic shopping mall market."