Korea’s top 3 retailers compete in Busan premium outlet market

[Courtesy of Lotte Premium Outlet Dongbusan]

South Korea‘s top three retail giants are set to compete in Busan with the reopening of premium outlets operated by Shinsegae Group and Hyundai Department Store Co. in September, challenging Lotte Outlet.

Shinsegae Simon Inc. announced Thursday that the Shinsegae Busan Premium Outlet, which first opened in August 2013, will reopen in September after a major renovation.

The upgrade will expand the operating area to 51,480 square meters, 1.5 times larger than before. Shinsegae aims to transform the outlet into a shopping landmark for the 7.5 million residents of Busan and surrounding regions.

The revamped Shinsegae Busan Premium Outlet will feature over 100 new brands, including a 1,750-square-meter Nike Factory Store, the largest outside the metropolitan area.

It will also debut 11 popular food and beverage brands from Seoul. The outlet will also see the creation of a 5,000-square-meter golf specialty store, the largest in the country.

[Courtesy of Shinsegae Busan Premium Outlet]

The outlet’s strength lies in its extensive outdoor space, with more than 50 percent of its common areas dedicated to green and resting areas.

Hyundai Department Store plans to close its department store in Busan next month for a two-month renovation, reopening in September as Connect Hyundai.

This new retail concept combines department store and outlet features, offering a mix of discounted fashion stores, beauty products, fashion specialty stores with regular season items, and experiential stores.

Hyundai‘s decision to incorporate outlet concepts stems from the belief that a department store alone cannot compete effectively.

Located in the old city center, Hyundai Department Store Busan has lost its leading position to Shinsegae Centum City store in Haeundae, which opened in 2009.

“By transitioning to a new format that combines a department store and an outlet, we aim to enhance store competitiveness and revitalize the old downtown area of Busan,” said a company official.

Currently, Lotte Premium Outlet Dongbusan leads the outlet market in Busan.

Connect Hyundai in Busan

Opened in December 2014, it is more than twice the size of Shinsegae’s outlet. Last year, Lotte Premium Outlet generated 713 billion won ($513.9 million) in sales, ranking first among Lotte‘s 22 outlets and second nationwide, following Shinsegae Yeoju’s 771 billion won.

With an operating area of 83,600 square meters, it is the largest outlet in the country.

In response to Shinsegae and Hyundai’s renewals, Lotte is developing a 5,000-square-meter outdoor rest area by the end of August.

“The Dongbusan outlet has been growing by over 10 percent annually,” said an official from Lotte Shopping Co. “Popular stores like Beaker and Maison Kitsuné opened in May this year, and the largest Zara store in the Yeongnam region is set to open in the first half of next year.”