[Click eStock] "Emart, Positive Profitability with Online Sales Expansion"

by Keum Boryeong

Published 05 Mar.2020 07:42(KST)

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E-Mart Wolgye Branch (Photo by Asia Economy DB)

[Asia Economy Reporter Kum Boryeong] Emart's online sales expansion is analyzed to have a positive impact on profitability.

According to Hana Financial Investment on the 5th, despite the COVID-19 pandemic, Emart discount stores' same-store sales in January and February decreased by 1% compared to the previous year. Park Jongdae, a researcher at Hana Financial Investment, stated, "Considering that same-store sales dropped by 6% during the 2015 Middle East Respiratory Syndrome (MERS) outbreak, this is a relatively surprising figure," and explained, "The expansion of online sales is contributing to the efficiency of offline stores, and the increased demand for daily necessities is leading to a re-inflow of traffic to offline stores beyond online supply."

Performance improvement is expected to continue. In the fourth quarter of last year, Emart discount stores' same-store sales growth rate fell by 1.2% year-on-year, indicating that offline performance has bottomed out, while SSG.com sales increased by 28% year-on-year, proving that the online food market share is rising. Researcher Park said, "Due to last year's big bath and restructuring effects, Emart's consolidated operating profit is expected to increase by nearly 50 billion KRW this year," adding, "Although the turnaround in performance due to the COVID-19 situation was expected to be possible from the second quarter at the earliest, recent performance has exceeded expectations, increasing the visibility of recovery."

eBay's decision to sell eBay Korea is analyzed as a favorable issue for Emart. The easing of 'reverse margin' marketing competition due to market restructuring increases the possibility of Emart's performance turnaround.