April 27, 2024

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[THE INVESTOR] South Korean retail giant Lotte Department Stores’s market share in the third quarter came in at 46 percent, according to a quarterly report of its rival Hyundai on Nov. 14.

This would be the first time Lotte has failed to account more than half the market share since 2000. Hyundai estimated that its own market share was 29 percent and that of Shinsegae was 24 percent. 

According to the report, Lotte’s market share peaked in 2004 at 55.4 percent and has been on the decline ever since.

Lotte acknowledged that its market share has shrunken relatively as it has not been aggressively expanding, but emphasized that it was not below a 3 percentage point drop.

In the third quarter, by their own accounts, Lotte’s revenue came in at 1.97 trillion won (US$1.66 billion), followed by Hyundai (1.24 trillion won) and Shinsegae (1.09 trillion won).

The actual market share in department store industry, however, is practically impossible as each company has their own accounting standards, industry sources say.

As for the merchandise purchased and sold by the retailers, the wholesale amount is counted as revenue while for the rest, only the commissions are tallied.

Shinsegae, in particular, is jointly operating its outlets with US real estate developer Simon which has a nondisclosure policy regarding the revenue. Its major branch in Gwangju is an affiliate with separate revenue as well.

Lotte has stated that its base market share was 51.5 percent as of end-2015. Shinsegae said its market share in the third quarter was 21.6 percent.

By Hwang You-mee (glamazon@heraldcorp.com)