The Rise Of Online Shopping Malls And The Decline Of Korean Department Stores

In 2014,

Lotte's Department suffered the first decline in its performance in ten years.

As consumers are more and more inclined to online shopping, and the number of Koreans from overseas shopping sites is increasing rapidly, the traditional department stores in South Korea suffer a double blow.

Not only Lotte Department stores, but also sales of other traditional physical retailers.

In February 8th, the report read: Korea

And other large department stores suffered a decline in sales in 2014, the first time in recent ten years.

According to statistics released by the Statistics Bureau of Korea, the sales volume of traditional department stores in Korea was about 29 trillion and 200 billion won in 2014, down from 29 trillion and 800 billion won in 2013.

As the overall economic situation continues to decline and domestic demand is flagging, the challenges faced by department stores, discount stores and warehouse wholesalers are becoming more and more serious.

In addition, more and more consumers are shopping in foreign websites. The traditional department stores in Korea are facing double pressure.

A 30 year old Korean working-class woman said, "I don't remember when I went to the department store last time.

Now I usually buy from online shopping malls.

Electronic equipment and other home appliances.

Because buying from online shopping mall is cheaper and free door-to-door.

So I don't think it's necessary to go shopping in a physical department store in person.

Statistics show that in 2014, about 45 trillion and 200 billion won trade volume increased by 17.5% over the same period in the same period, compared with 38 trillion and 500 billion in 2013.

The rapid rise of online shopping volume mainly came from the online shopping of mobile clients. In 2014, the total amount of shopping by Korean consumers through smart phones was 14 trillion and 800 billion won, which was 126% higher than that of 6 trillion and 600 billion won in 2013.

The proportion of online shopping centers is increasing.

Nearly 50% of online store sales are fashion products and beauty products.

For online shopping sites, cosmetic sales increased by 26.8% over the same period, while sales of clothing and other fashionable goods increased by 16.7%, and sales of food and beverages continued to rise.

Not only that, the total consumption of Korean purchases directly from overseas shopping websites has also increased rapidly, which has further hurt traditional retailers.

Last year, the total consumption of Korean products purchased from overseas websites amounted to US $975 million, up by 37% over the same period, including health food, clothing, bags and shoes.

In 2013, the value was $709 million 300 thousand.

As for the overall trend, more and more consumers are turning to online shopping, while the number of customers in traditional department stores is less and less.

Hong Sung-soo, a local securities investment analyst in Korea, thinks that consumers with heavy financial resources may continue to shop in traditional department stores, while middle and low income groups in Korea are more and more inclined to online shopping.