As 'Jipkok' Increases, Demand for Home Appliances Replacement Rises... Department Stores Bustle Again

Lotte Hi-Mart and Electron Land
Increased TV, Refrigerator, and PC Sales Last Year
Both Revenue and Operating Profit Increased
Effect of Transformation into Experiential Large Stores

On the 13th, a notice was posted on Lotte Hi-Mart's online shopping mall informing customers of delivery delays for a refrigerator product due to an overwhelming number of orders.

[Asia Economy Reporter Seungjin Lee] The home appliance retail market, which had been struggling due to the onslaught of e-commerce, is regaining momentum. The demand for replacing home appliances such as TVs and refrigerators increased due to the 'stay-at-home' trend caused by the novel coronavirus (COVID-19), and retail stores have transformed into experiential stores, attracting customers who want to see and purchase products in person.

"It's expensive, but let's try it once before buying"

According to the industry on the 13th, Lotte Hi-Mart and Electron Land reported that sales of major items such as TVs, refrigerators, and PCs significantly increased last year, resulting in both sales and operating profits rising compared to the previous year.

Lotte Hi-Mart's sales of TVs and PCs last year increased by 15% and 12% respectively compared to the previous year, while Electron Land's sales of refrigerators and PCs also rose by 29% and 42% respectively during the same period. Although on a smaller scale, some home appliances such as dishwashers saw sales surge by more than 150% year-on-year at both companies. Sales of dryers and clothing care products also increased.

Operating profit declined for 3 consecutive years, revived by COVID-19

With the activation of the online market, the number of customers visiting offline stores to purchase home appliances had been decreasing over the past few years. For market leader Lotte Hi-Mart, operating profits declined for three consecutive years from 2017 to 2019.

However, last year, COVID-19 played a role in attracting customers who had moved away from offline stores. The retail industry’s strategy of closing low-profit stores and expanding experiential large stores proved effective. Lotte Hi-Mart opened 'Mega Stores' at seven locations nationwide, starting with the Jamsil branch in January last year. After the Jamsil branch was renewed as a Mega Store, sales increased by 36%.

Home appliances remain popular in the new year

The enthusiasm for purchasing home appliances continues into the new year of the Year of the Ox. At Lotte Hi-Mart, some products such as refrigerators even have notices stating, "Due to high order volume, delivery delays are occurring."

Lotte Hi-Mart renewed and reopened its Daechi branch as a premium store on the 1st and plans to continuously expand premium stores such as Mega Stores. Electron Land plans to secure various sales channels, as online purchases by the MZ generation (born in the 1980s to early 2000s) are active.

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