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tzechuk
Joined: 20 Dec 2004
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 Posted: Mon May 19, 2008 8:00 am Post subject: Let's all go shop in HomePlus!!! |
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Shinsegae Co., operator of the country's leading discount-store chain E-Mart, has no reason to be threatened of losing its leading market position from the unexpected buyout of E.Land Group's Homever discount chain by U.K.-based Tesco Plc., the company's officials and some industry experts said yesterday.
"Tesco's acquisition will not have a negative impact on our business, and we aim to retain our leading market position with the brand power of our products and our existing operational structure," Kim Yun-sub, an E-Mart spokesman, told The Korea Herald.
Tesco, the U.K.'s biggest hypermarket operator, announced last week that it agreed to buy Korea's Homever discounter, including debt, for $1.9 billion. The British retailer operates Korea's second-largest discounter, Homeplus, which is a joint venture between Tesco, the majority shareholder with a 94 percent stake, and Samsung Group, which owns the remaining 6 percent.
The buyout allows Homeplus to add 36 Homever stores, raising its total number of outlets to 102. This tightens the race in terms of physical scale for E-Mart, which has 112 outlets.
The country's top three discount operators -- Shinsegae, Samsung Tesco, and Lotte Shopping -- have been in a fierce race to expand and snatch market share in a country where finding lucrative locations for new stores is a challenge.
Kim said Homeplus' accelerated expansion has not pressured Shinsegae to change its strategies, and stressed that it will continue to focus on its current strategies. Along with opening new outlets, E-Mart is focused on widening its range of quality yet price-competitive products, such as through expanding its private brands, and bringing in goods through direct purchasing, according to Kim.
E-Mart plans to open eight more new outlets this year, following the store it recently opened in Yeouido, and raise the total to 160 by 2012.
Shinsegae's confidence lies on Homeplus' weaker operating income rate of 2 percent compared with E-Mart's 7 percent. Last year, E-Mart recorded sales of 7.56 trillion won, while Homeplus projects sales to reach about 6 trillion won for the year ended in February. Its sales totaled 4.07 trillion won in the year to February in 2007.
Homever has been struggling to stabilize operations since it jumped into discount retailing by acquiring the discounter formerly owned by France-based Carrefour SA in 2006. E.Land, a leading apparel manufacturer, had taken on the labor unrest that existed under Carrefour. Tussles with strikes and labor disputes hampered Homever's sales performance last year.
Park Jin, an analyst with Good Morning Shinhan Securities Co., expects competition in the market to intensify, but he believes it is not bad enough to weaken E-Mart's market position.
"Homeplus may have caught up in terms of number of stores, but success is measured by same-store sales, and Homever and Homeplus with respect to location would have 10 overlapping stores," said Park. He also cited the existing gap in operating profit between E-Mart, which posted 800 billion won last year, and its rivals.
"The figure combined for Homeplus and Homever still would not be big enough to hurt E-Mart," Park said, suggesting that E-Mart has enough leeway to strengthen its position.
But the expert warned that Tesco's acquisition would boost its bargaining power, while private brands as of 2007 accounted for 18 percent of its sold products. Private brands for E-Mart make up 9 percent.
Still, Park cautiously made projections about market changes. He said traditional markets, which account for about 50 percent of the fresh food market, also acts as a competitor in terms of consumer purchasing outlets.
However, the expert said the tightened race could raise consumer awareness of hypermarkets and trigger a new level of competition in the industry.
"It could mean an increase in product choices for consumers and cheaper goods," said Park, noting that discount stores can enjoy the merits of having an economy of scale.
For Tesco, Asia's fourth-largest economy is its biggest overseas market and the most successful away from home.
With the announcement last week, Terry Leahy, chief executive of Tesco, said: "After nine years of successful development in Korea, Samsung Tesco is now a substantial business and our leading international operation. This acquisition of high quality assets is an important strategic move, which will allow us to accelerate our growth in this key market and deliver a much stronger offer for customers as we convert the stores to Homeplus. It also demonstrates our continued commitment to invest in Korea."
By Yoo Soh-jung
([email protected]) |
Let's all do that, so HomePlus becomes the biggest retailer in Korea!!!
It's a better supermarket anyway. |
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butlerian
Joined: 04 Sep 2006
Location: Korea
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| Posted: Mon May 19, 2008 8:04 am Post subject: Re: Let's all go shop in HomePlus!!! |
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| tzechuk wrote: |
Let's all do that, so HomePlus becomes the biggest retailer in Korea!!!
It's a better supermarket anyway. |
Agreed. |
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Draz
Joined: 27 Jun 2007
Location: Land of Morning Clam
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| Posted: Mon May 19, 2008 2:26 pm Post subject: |
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There is no Homeplus near my house.
No E-Mart either though. |
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poet13
Joined: 22 Jan 2006
Location: Just over there....throwing lemons.
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| Posted: Mon May 19, 2008 3:57 pm Post subject: |
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"The buyout allows Homeplus to add 36 Homever stores, raising its total number of outlets to 102."
So is Homever the same company as Homeplus? If it is, that's dissapointing. Our Homever sucks butt. Emart is much better in my city. |
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mrsquirrel
Joined: 13 Dec 2006
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| Posted: Mon May 19, 2008 4:04 pm Post subject: |
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I found a big E-Mart at Suji this weekend but it didn't have the Pain is Good sauce that it advertises on it's website.
E-mart is crap.
I am going to venture into Bundang this weekend and try and find a HomePlus |
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Horangi Munshin
Joined: 06 Apr 2003
Location: Busan
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| Posted: Mon May 19, 2008 4:09 pm Post subject: |
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I always shop at Homeplus. I like the the Tesco products filtering in.
poet13, Homever does suck but it is a separate outfit to Homeplus. |
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IlIlNine
Joined: 15 Jun 2005
Location: Gunpo, Gyonggi, SoKo
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| Posted: Mon May 19, 2008 4:10 pm Post subject: |
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| poet13 wrote: |
"The buyout allows Homeplus to add 36 Homever stores, raising its total number of outlets to 102."
So is Homever the same company as Homeplus? If it is, that's dissapointing. Our Homever sucks butt. Emart is much better in my city. |
No. This buyout will take place in the future. Currently they are separate companies. Currently one is owned by Tesco (homePLUS) the other by ELand (homeEVER). |
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poet13
Joined: 22 Jan 2006
Location: Just over there....throwing lemons.
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| Posted: Mon May 19, 2008 4:15 pm Post subject: |
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| Thanks, good to know. |
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pkang0202
Joined: 09 Mar 2007
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| Posted: Mon May 19, 2008 4:46 pm Post subject: |
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| HomePlus is awesome. |
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sojourner1
Joined: 17 Apr 2007
Location: Where meggi swim and 2 wheeled tractors go sput put chug alugg pug pug
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| Posted: Mon May 19, 2008 4:53 pm Post subject: |
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| Yes, HomePlus beats Emart by a long shot as they have more western products and better bargain sales on things. Emart is more of a place to see and be seen rather than a smart shoppers store like HomePlus. I lived in Changwon and Emart was outragious, but stylin with cool party music while HomePlus was laid back with more selection and better prices. |
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thatwhitegirl
Joined: 31 Jan 2007
Location: ROK
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| Posted: Mon May 19, 2008 5:22 pm Post subject: |
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Love Homeplus. It's fairly new (since October) in our tiny rural town, and I just love it.  Such a treat after we had been shopping at crappy little Hanamarts.
So fun just to browse the big aisles and find good and often random products. |
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waynehead
Joined: 18 Apr 2006
Location: Jongno
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| Posted: Mon May 19, 2008 5:26 pm Post subject: |
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| If I had a homeplus w/in walking distance I'd shop there, but I defn hit up my local lotte mart more often. |
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spliff
Joined: 19 Jan 2004
Location: Khon Kaen, Thailand
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| Posted: Mon May 19, 2008 5:37 pm Post subject: |
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| So, where's the homeplus in the Yong-in, Suji or Bundung area? |
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eamo
Joined: 08 Mar 2003
Location: Shepherd's Bush, 1964.
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| Posted: Mon May 19, 2008 5:41 pm Post subject: |
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I say support Homeplus and avoid E-mart.
Homeplus tries a bit to get some western goods in.
When my local Walmart transformed into an E-mart 2 years ago, the first thing E-mart did was remove the foreign goods aisle. Then jack-up the price of imported booze.
Wankers. |
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Horangi Munshin
Joined: 06 Apr 2003
Location: Busan
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| Posted: Mon May 19, 2008 7:46 pm Post subject: |
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| eamo wrote: |
I say support Homeplus and avoid E-mart.
Homeplus tries a bit to get some western goods in.
When my local Walmart transformed into an E-mart 2 years ago, the first thing E-mart did was remove the foreign goods aisle. Then jack-up the price of imported booze.
Wankers. |
 That they are!!! |
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