| Hyundai Department Store Group will enter the domestic premium outlet sector. It is expected to ignite fierce competition with market leaders Shinsegae Chelsea and Lotte Department Store.
Hyundai said Wednesday that it bought an outlet lot at Gimpo Terminal in Gyeonggi Province Tuesday to open its premium outlet in 2014. The group had announced in April its plan to open a luxury outlet in the Songdo International Business District of Incheon.
Construction of the Gimpo outlet, to cover 52,375 square meters, will begin in the first half of next year. Hyundai expects more than 1.5 million customers will visit the outlet annually.
The biggest competitive advantage of Hyundai`s outlet is its proximity to Seoul, being just 17 kilometers away from the Seoul City Hall. By contrast, Shinsegae뭩 premium outlet in Yeoju, Gyeonggi Province, is 67 kilometers from the capital and Lotte뭩 outlet in Paju, Gyeonggi Province, is 30 kilometers away.
Due to its proximity to the Han River and a yacht club in the Seoul-Incheon waterway, Hyundai뭩 outlet also commands a fine view. Another advantage is easy access to major roadways such as Olympic Road, the Seoul Ring Expressway and the Incheon International Airport Expressway.
Hyundai said the outlet will be a shopping and recreational complex with entertainment facilities to meet the needs of family customers and foreign tourists.
The group cited the need for business diversification as the reason for its full-scale entry into the premium outlet business. Because Hyundai is on track to begin building the outlet in the Songdo International Business District, three or four more Hyundai outlets will be added to Seoul and major cities.
Hyundai will soon sign a memorandum of understanding with Songdo Technopark and the Incheon Free Economic Zone Authority for the construction of the outlet.
Having grown under 5 percent, domestic department stores are scrambling to build premium outlets because of the latter`s double-digit growth.
Sales of Lotte뭩 premium outlet in Gimhae in the first five months of the year grew 11.2 percent from the same period last year. Those of Lotte Paju Premium Outlet surpassed its goal more than 20 percent over the same period.
Shinsegae, which was the first in Korea to enter the business, will open an outlet in Busan in the latter half of next year and double the size of its Yeoju outlet in 2014 to make it the biggest of its kind in Asia.
Lotte will also double the size of its Gimhae outlet by the first half of next year.