Lotte Shopping's e-commerce head resigns

Its e-commerce business growth has lagged compared to its peers.

Lotte Shopping’s head of the e-commerce unit, Cho Young-je, resigned as the company’s online business failed to take off, IGD reported.

The company is currently looking for Cho’s replacement who has more knowledge in online commerce, as the firm looks to turnaround the struggling business.

"Change everything from Lotte's past," Lotte Group chairperson Shin Dong-bin said in a speech.

Cho started his career at Lotte Department Store in 1990, and took over Lotte Shopping's e-commerce sector in January 2020.

Lotte Shopping's gross merchandise value (GMV) climbed 7% YoY to $6.74b (KRW7.6t) in 2020, lagging behind the market average of 19% rise. In comparison, the GMV of its rival Shinsegae jumped 37% over the same period.

Lotte announced its plan to close 200 stores to concentrate on e-commerce in 2020. It launched Lotte ON, a platform that integrates all Lotte’s retail services, including supermarkets, department stores, home appliances, and drugstores.

However, IGD found that the platform has many issues dealing with big data. It crashed often, which has alienated many customers. “Winning repeat shoppers has become a major problem for the retailer,” IGD’s senior retail analyst Jiong-Jiong Yu said.

Lotte has also been short on delivery capacity in comparison to its competitors. It offers a two-hour delivery service across the country. To make it work well, IGD said that the company will need to hike the number of distribution centres designed for this service.