SEOUL, March 19 (Korea Bizwire) – With traditional brick and mortar retailers feeling squeezed by the rapid growth of online shopping, a new tactic has them fighting back by building massive shopping malls that offer both shopping and entertainment at the same time.
Lotte and Shinsegae have announced plans to build seven shopping malls (four by Lotte, three by Shinsegae) in the Seoul area by 2018.
The giant shopping complexes will hold department stores, large discount stores, cinemas, shopping malls and restaurants in one space so that customers can shop and entertain themselves without having to change locations.
According to Lotte officials, the company will be opening a shopping complex in Eunpyung New Town in December. Since 2011, Lotte has been aggressively opening shopping malls with new complexes in Jamsil, Suwon, and East Busan.
“The era of competing through price is over”, Lotte officials say. “By providing a space where people can stay and experience a variety of entertainment, we hope to attract new customers.”
Shinsegae has picked Hanam Union Square as its main focus this year. A department store, cinema, theme park for kids, and entertainment facilities will be developed at the shopping complex. In addition to high-fashion brands, SPA brands will have stores in the new mall.
Shinsegae officials commented that they are “preparing the shopping complex as a new growth driver”. They added that the new shopping complex will provide “various attractions that can figure in the everyday lives of consumers”.
The moves by these large retailers seem to be rooted in a sense of crisis. Sales at offline stores are dropping due to the increase in the popularity of online shopping.
To draw consumers to brick and mortar locations, attractions such as cinemas, restaurants and amusement facilities are being developed.
However, there is also concern that too many shopping complexes are being built relative to the size of the communities they’re located in.
The Lotte and Shinsegae shopping complexes in Eunpyung only have two subway stations between them. The shopping malls in Songdo share a street.
The industry is already expecting fierce competition, and only the strongest are expected to survive.
By M.H.Lee (email@example.com)