South Korea’s discount chain Homeplus on Thursday raised the stakes in the competitive retail market here by announcing its full-fledged expansion of specialized branches and online business.
During a press conference on its business strategy held in Seoul, Homeplus CEO Lim Il-soon said that the retail giant will aim to raise its online revenue from around 600 billion won last year to 2.3 trillion won by 2021 through innovation that breaks the boundaries of online and offline shopping.
Homeplus’ “special store,” which is a combination of large supermarket and warehouse stores, will be increased to 30 from current 16 nationwide within the second half of this year, and eventually to 80 by 2021.
Homeplus CEO Lim Il-soon speaks during a press conference in Seoul on Thursday.(Homeplus)
The special stores, introduced in June last year, is said to have raised cost efficiency by lowering the margin of each product through downsizing operating costs such as by reducing manual product displays. These stores have been showing revenue growth rate that is higher by an average of 16 percent from those that have not turned “special,” according to the firm.
Homeplus said it will also transform all of its 140 branches nationwide to double as “online logistics centers” to expand its online business. This is to make use of existing stores rather than building costly new logistics centers, at the same time ensuring faster deliveries to nearby residential hubs.
For this, 107 of the branches will reinforce their online logistics capacities. By 2021, all branches nationwide will have their online capacities strengthened, the firm said.
The number of “pickers,” who are responsible for sorting products for online deliveries will be increased from 1,400 to 4,000, while the number of cold chain delivery vehicles will jump from around 1,000 to 3,000, so that daily deliveries will rise from the current 33,000 to around 120,000.
Homeplus also said that in order to contribute to each local community that they do business in, they are introducing self-storage service, first for Ilsan, and mulling shared kitchen or shared office businesses.
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khnews@heraldcorp.com)