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Lotte Shopping losing digital experts at crucial time

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Cho Young-je, former head of Lotte Shopping's e-commerce business unit, explains the newly launched Lotte ON service during a press conference held in Seoul on April 27, 2020. Courtesy of Lotte Shopping
Cho Young-je, former head of Lotte Shopping's e-commerce business unit, explains the newly launched Lotte ON service during a press conference held in Seoul on April 27, 2020. Courtesy of Lotte Shopping

By Kim Jae-heun

A growing number of IT experts at Lotte, who have been leading the group's retail unit, are leaving the company at a crucial time of business expansion.

Hong Sang-woo, former chief director of data platform and customer data analytics at Lotte Shopping's e-commerce business, transferred recently to Samsung Group's marketing affiliate Cheil Worldwide.

Kim Hye-young former director of artificial intelligence (AI) at Lotte Shopping, also left the retail firm and found a new position at Samsung SDS. Kim is an AI expert who was ranked by IBM among the world's top 40 female leaders in the field in 2019. She led projects transforming the shopping experience for Lotte's e-commerce customers.

Kim Hyun-jin, former head of the platform center for Lotte ON, moved to food manufacturer CJ CheilJedang only a year after he came to Lotte Shopping.

The three IT experts are said to have moved over to different companies as they found limitations in leading Lotte Shopping's digital transition to e-commerce.

"We have seen many cases where people recruited as external experts grow tired of their limited authority and suffer from their employer's complicated reporting procedures. The field of digital transformation takes a lot of time, but employers expect immediate outcomes that tire them out," a Lotte Group official said.

This is likely to hurt Lotte Shopping as it is going through an important stage of digital transformation in the e-commerce sector.

Under the new management of Lotte ON's new CEO Na Young-ho, the retail firm has embarked on an aggressive marketing drive. But it has been unable to catch up with its rivals. Last year, Lotte Shopping's gross merchandise value stood at only 7.6 trillion won, up 7 percent year-on-year. Considering that Coupang and Shinsegae achieved double-digit growth in the same period, Lotte Shopping is still struggling to make its mark in the sector.

Coupang has raised funds through an IPO on the New York Stock Exchange to build more fulfilment centers across the country, while Naver formed a strategic alliance with CJ Logistics, the country's largest parcel delivery company, to beef up its delivery system. Shinsegae acquired eBay Korea in June to become the second-largest e-commerce firm.

"Experts from outside first come to Lotte aspiring to improve Lotte Shopping, but soon become surprised by the vertical organizational culture. Lotte Group Chairman Shin Dong-bin emphasizes the importance of digital transformation, but it seems that the executive directors at the firm care only about business performance," an industry source said.



Kim Jae-heun jhkim@koreatimes.co.kr


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