Emart Parts Ways with Online Business Division... Total Sales Decline by 1.7%

Amid Declining Large Mart Business Conditions... Offline Existing Store Sales Stagnation

[Asia Economy Reporter Cha Min-young] Emart's total sales were tentatively estimated to have decreased last year due to the spin-off of its online business division. The stagnation of sales in its major discount store segment, affected by the sluggish large mart market, also impacted the company's overall performance.

On the 10th, Emart announced through a disclosure that its total sales (separate basis) for last year (January to December) amounted to 14.6733 trillion KRW, down 1.7% compared to the same period the previous year. As a result, the sales growth trend of 3.2% in 2018 turned negative.

By business division, sales in all major segments increased, but the spin-off of the online business division had a significant impact. In fact, sales of specialty stores such as Electromart, Emart Days, No Brand, and Boots rose by 31.2% year-on-year, while warehouse-type stores like Traders (22.4%) and the core discount store business (3.1%) also contributed.

Emart's parent company, Shinsegae Group, spun off Emart's online business division to establish an independent corporation, Emart Mall (currently SSG.com), to strengthen its online business. Subsequently, in March, Shinsegae Mall, which separated from Shinsegae, was merged into it, expanding its scale. The company also announced plans to invest more than 1 trillion KRW in the online-only corporation.

The stagnation of the offline large mart market, influenced by the aggressive competition from e-commerce companies specializing in dawn delivery and other services, also played a role. In fact, last year, total sales at existing offline stores decreased by 2.6% compared to the previous year. The performance of existing large mart stores, which have a significant impact on sales, fell by 3.4%, while Traders increased by 1.8%. Existing stores refer to those that have been operating normally for more than one year.

An Emart official said, "The spin-off of the online business division was a major factor in the decline in total sales," and added, "Specialty stores started being counted from last year, so there is no comparative figure."

This content was produced with the assistance of AI translation services.