Lotte ON aims for market rebound amid TMON, WeMakePrice fallout

[Courtesy of Lotte ON]

Lotte ON, the e-commerce platform of Lotte Group, is looking to turn the tide in South Korea’s e-commerce market, capitalizing on the recent turmoil caused by TMON and WeMakePrice, which left users struggling with refunds.

Following last month’s launch of its Japan-direct shopping section, Lotte ON is now focusing on expanding its travel business, seeking to leverage the strong trust consumers have in Lotte Group.

According to industry sources on Monday, Lotte ON is aggressively hiring travel and e-commerce experts to strengthen its key product categories.

The company plans to establish a dedicated travel team as early as next month, with the goal of launching a travel product section by early next year.

Lotte ON’s decision to expand into the travel sector follows widespread consumer mistrust in online travel bookings, as many were left stranded without refunds after making summer holiday reservations on TMON and WeMakePrice.

Lotte ON hopes to reassure consumers by emphasizing the backing of Lotte Group, making it a safer choice for booking travel products.

As part of Lotte Group, Lotte ON benefits from the synergy of its retail affiliates, including department stores, supermarkets, Hi-Mart, and home shopping. For select categories like beauty, fashion, luxury, and kids’ products, Lotte ON operates specialized sections that resemble dedicated online stores.

Last month, Lotte ON launched its Japan-direct shopping section, which has quickly gained popularity.

Sales from this section surged by 30 percent from the previous month as of August 15. One of the section’s major draws is that the products are sourced directly by buyers at Lotte Duty-Free Ginza, ensuring authenticity and trust.

Japanese product imports and travel have traditionally been strong areas for competitors like Qoo10 and TMON. However, as Lotte ON quickly adapts to fill the gap left by TMON, industry experts are paying close attention.

According to Mobile Index data, Lotte ON’s weekly active users grew 16.6 percent from 939,000 during the fourth week of July, when payments stopped at TMON, to 1.1 million in the third week of August.

Lotte ON’s recent momentum contrasts with its struggles earlier this year. There had been internal discussions within Lotte Group about overhauling its e-commerce strategy, with some suggesting separate online plans for each of the group’s major retail businesses.

However, recent developments indicate that Lotte ON is doubling down on its role as the group’s integrated online platform, strengthening both its product offerings and delivery services.

To boost product competitiveness, Lotte ON began waiving fees and offering promotional support for new sellers on July 24, targeting high-performing sellers who exited TMON and WeMakePrice. The platform’s success will largely depend on attracting these sellers to enhance its product selection.

Lotte ON has also ramped up its delivery capabilities, launching next-day delivery services in April. It also plans to expand the number of available items from 10,000 to 230,000 by the end of this month. Additionally, it aims to introduce same-day delivery services later this year.

Despite four consecutive years of losses since its 2020 launch, Lotte ON is showing signs of improvement.

While quarterly losses remain around 20 billion won ($15 million), the platform has begun restructuring to create a more profitable organization.