Lotte Department Store is considering entering the Chinese online shopping market by joining up with Chinese e-commerce heavyweight Alibaba.

Such cooperation is expected to draw Chinese consumers in need of direct shopping from Korean companies, while at the same time enhancing Lotte’s brand name, which is referred to as “Letian” in China. Alibaba Group powers four-fifth of Chinese online consumer shopping and the company has posted $3.06 billion (3 trillion won) in the fourth quarter of 2013.

“We are still considering our options,” a Lotte spokesman told The Korea Herald.

Lotte, as South Korea’s largest retailer, operates five department stores in China. 

In the first phase of the proposed deal, Lotte’s Shenyang branch will join Alibaba’s subsidiary online shopping mall, Tmall (www.tmall.com), by the end of the year. Some of the most globally famous Korean fashion and beauty brands sold at the department store will be introduced in the mall, and other brands will be added exclusively for online shopping. In the end, all five Lotte department stores in China will join Tmall and Alibaba, Lotte said.

“Lotte initially considered establishing a Chinese version of lotte.com, its online shopping mall. However, the country’s logistics and authorization process are very different from Korea,” said a Lotte insider, explaining why the company is considering the cooperation.

“By joining Tmall, Lotte can take advantage of Tmall’s payment and delivery infrastructure without having to establish a separate corporation. We are also hoping that this will create an economy of scale and raise our brand awareness,” he added.

Lotte’s project reflects the growing demand for an e-commerce platform between Korea and China, experts say. According to Chinese authorities, the e-commerce market in China marked 1.9 trillion yuan ($306.2 billion) as of 2013, and thanks to hallyu, or the Korean pop culture wave, the demand for Korean brands and products have been on the rise.

“More companies are expected to follow Lotte’s suit,” an industry watcher said.

By Bae Ji-sook (baejisook@heraldcorp.com)