"Let's go to Himart" — the slogan once ubiquitous in South Korean advertising.
Himart, now operating as Lotte Himart, was once the undisputed king of IT and electronics retail in South Korea. Those days are gone. The rapid growth of online shopping, combined with Samsung Electronics and LG Electronics building out their own direct sales networks, has steadily eroded Himart's position in the market.
Then came Coupang Inc. E-commerce players led by Coupang Inc have pressed their price advantage to capture an ever-larger share of the market, pushing a once-dominant Himart to the brink of a survival crisis. Lotte Himart has responded by making the drastic move of replacing its chief executive.
Himart posted an operating loss of 14.8 billion won (about $9.69 million) in the first quarter of this year. Total sales for the same period came to 636.8 billion won, down 4.3 percent from a year earlier. Revenue that once exceeded 4 trillion won has been cut roughly in half, now hovering in the 2 trillion won range.
The share price tells an even grimmer story. Himart's stock, which once traded at 100,000 won, had collapsed to 6,750 won as of Friday.
Lotte Group acquired Himart from Yujin Enterprise in 2012 for 1.245 trillion won. At the time, Himart commanded well over 40 percent of the domestic electronics retail market — an unrivaled No. 1.
Today, Himart's market capitalization stands at 159.4 billion won as of Friday, and its market share has been halved to around 20 percent. Its store count has also shrunk from 407 locations in 2022 to roughly 300.
How did a retailer that once dominated South Korea's IT and electronics market fall so far, so fast?
Himart's growth began to stall in 2022, precisely when the online market was surging. Consumers increasingly prefer to buy home appliances and IT products online rather than in physical stores, drawn by lower prices.
In the offline space, Samsung Electronics and LG Electronics have expanded their own branded stores, sharply reducing their reliance on Himart as a sales channel. Himart has already lost the top spot to Samsung Electronics and now faces a serious challenge from LG Electronics' Best Shop chain as well.
Lotte Himart has moved swiftly to replace its top executive, tapping a business strategy specialist from travel-tech platform Yanolja as its new chief executive.
Lotte Himart said Sunday it has designated Vice President Kim Jong-yun as its incoming chief executive. Kim built his career in business strategy, marketing and new business development at companies including Google and Yanolja. At Yanolja in particular, he served as chief strategy officer, leading global fundraising efforts and driving the company's business expansion.
Whether Lotte Himart can engineer a turnaround under its new leadership remains to be seen.
park@heraldcorp.com
