What: Lotte Shopping unveils strategic plan to achieve 20 trillion won in sales by 2030, with a focus on luxury retail and international growth.

Why it is important: The company's focus on luxury retail and overseas markets signals a significant transformation in its business model, aiming to capitalize on emerging opportunities and diversify revenue streams in a competitive retail environment.

Lotte Shopping, an affiliate of South Korean retail giant Lotte Group, has announced ambitious targets for 2030, aiming to achieve 20 trillion won (USD 14.8 billion) in sales. This goal includes earning 3 trillion won from overseas markets and targeting an operating profit of 1.3 trillion won. These figures represent a substantial increase from the 14.55 trillion won in sales and 508.4 billion won operating profit reported last year. To achieve these objectives, Lotte Shopping plans to upgrade eight major department stores into luxury goods-focused establishments, develop next-generation complex shopping malls, strengthen e-commerce platforms, and expand its presence in Southeast Asia. The company's international expansion will be spearheaded by Lotte Shopping Holdings (Singapore) Pte. Ltd., which will focus on growth and profitability in new markets. In response to current economic challenges, Lotte Shopping has revised its short-term targets for 2026, lowering sales and operating targets to 15.2 trillion won and 800 billion won respectively. To enhance shareholder value, the company plans to increase shareholder returns to 35 percent of its annual net profit and provide at least 3,500 won per share in dividends.

IADS Notes: Lotte Shopping's strategic plan aligns with broader trends in South Korea's retail sector, which has shown resilience despite recent challenges. While duty-free stores experienced significant sales declines due to changing shopping patterns among Chinese tourists , department stores have demonstrated adaptability. In early 2024, major retailers like Lotte, Shinsegae, and Hyundai posted robust sales growth, with Lotte Department Store seeing a 1.4% increase. This resilience is further evidenced by the resurgence of department store culture centres, which have experienced increased demand and are being enhanced with premium content to attract diverse customer segments. These developments reflect the industry's broader transformation, focusing on creating experiential offerings and leveraging various strategies to remain competitive in an increasingly dynamic retail environment.

Lotte Shopping targets USD 14.8bn sales in 2030