South Korea’s Shinsegae Group and Lotte Group square off in a battle for supremacy in the retail industry.
Last year, Shinsegae Group opened its latest luxury department store on the home turf of archrival Lotte Group, igniting another round of aggressive competitions for customers. Shinsegae Centum City, the 510,000 square meters (approximately 5.5 million square feet) colossal shopping and entertainment complex has eclipsed even Macy’s New York City Herald Square flagship store to set a new Guinness Record as the largest department store in the world.
Located on a former airport site in the coastal city of Busan, Korea, Shinsegae Centum City is comprised of a 14-story east wing which houses an 8-floor department store, restaurants, a gym and a golf driving range, as well as a 9-story west wing which features an indoor ice skating rink, concert hall, multiplex cinema, an art gallery, and spa facilities. It costs 1.025 trillion won (US$1.09 billion) to build.
Not to be outdone, Lotte Group is already building its own new colossal project, Lotte World, in Busan. It features a Las Vegas Bellagio like water fountain that is supposed to be the largest in the world. A planned skyscraper with a scheduled completion in 2016 would be among the tallest in Asia.
Shinsegae and Lotte have arrived at the top of the retail game through different paths. Lotte’s empire is built on its high-end department stores, a segment where it claims three times the market share of Shinsegae. The foundation of Shinsegae’s business empire is built on its discount E-Mart stores, and this lower end retail market is where Shinsegae claims three times the market share that the discount Lotte Mart attracts. In 2009, for the first time in its operating history, Shinsegae overtook Lotte in total revenue, posting $11.4 billion in sales compared to Lotte’s $10.7 billion.
This fierce domestic battle is continuing overseas. Shinsegae now operates 26 discount stores in china and plans to open another 100 stores there by 2015. Lotte operates 79 discount stores in China as well as many other outlets in Vietnam and Indonesia. This year, Lotte continues its expansion by opening a hotel in Russia, right next to the high-end department store it founded there in 2007.
Anyway, the Clash Of Titans Continues….