Lotte Hi-Mart's PB Electronics 'Winning Move'..."Escaping Poor Performance"

HiMade Sales Up 30% This Year
Continued Launch of Large Products, Lineup Expansion
PB Strengthening, Profitability Improvement Expected
Q2 Operating Profit Down 99%

[Asia Economy Reporter Lim Chun-han] Lotte Hi-Mart is strengthening its private brand (PB), HiMade, to overcome poor performance. This strategy aims to counter e-commerce competitors leveraging price competitiveness and to seek new customer acquisition and profitability improvement.

According to Lotte Hi-Mart on the 13th, HiMade's sales have grown by an average of 25% annually from 2016 to last year. From January 1 to September 7 this year, sales increased by 30% compared to the same period last year. HiMade handles everything from product development, quality verification, mass production, to operation directly, making it up to 40% cheaper than general home appliance brands. Some stores even operate brand zones exclusively featuring HiMade products.

HiMade started with 30 items in 2016, expanded to 50 items in 2020, and 80 items in 2021. Currently, it sells 85 items and about 300 products, with plans to increase to around 100 items within the year. Last year, the product lineup was strengthened by subdividing into four sub-brands: Basic, Design, Idea, and Series. Basic targets customers who want to purchase products at reasonable prices rather than additional functions; Design collaborates with professional designers for customers who prioritize design over price; Idea suits customers seeking convenience in new lifestyles; Series offers various products grouped under different themes.

Models are introducing HiMade products at the Lotte Hi-Mart Daechi branch in Seoul.

A popular HiMade product is the ‘Honest 4-Door Refrigerator.’ It has a capacity of 470 liters and allows temperature settings from minus 3 degrees to plus 5 degrees Celsius. This product is sourced directly from overseas, developed through direct contact between Lotte Hi-Mart’s merchandise planner (MD) and Homa, a specialized refrigerator manufacturer in China. As a result, it was offered at 799,000 KRW, about 20% cheaper than general brands with similar specifications. Consequently, it ranked first in sales among all 4-door refrigerators and received positive responses from consumers.

Lotte Hi-Mart plans to continuously release large home appliances such as kimchi refrigerators and TVs to build a broad HiMade lineup. Additionally, to introduce various lesser-known overseas products, it is expanding direct sourcing and strengthening collaboration with major domestic partners to develop star products. Attention is focused on whether this PB product strengthening can lead to profitability improvement. Lotte Hi-Mart’s sales in the second quarter of this year were 887.454 billion KRW, down 10.2% from the same period last year, and operating profit was 251 million KRW, a 99.2% decrease.

A Lotte Hi-Mart official said, "As inflation continues for a long time, home appliances that are reasonably priced and of good quality are gaining popularity," adding, "We will continue to introduce various products that fit trends and strengthen the competitiveness of the HiMade brand."

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