South Korea’s largest discount supermarket operator E-mart says it is recommitting to the China market and will stop closing stores there.
E-Mart once operated 27 discount grocery stores in the mainland, but for the last five years has been constantly returning its model and shutting down underperforming outlets.
However this week, an E-mart executive signalled a change of course.
“[After] the August 3 closure of a branch in Shanghai, there will be no additional shutdowns of the remaining eight branches in east China,” a media spokesperson said.
E-Mart, part of the Shinsegae corporation, says the restructuring and closures will reduce its net loss by 35 per cent this year and a greater focus on eCommerce will help it approach a hitherto elusive profitability.
“The region continues to be one of the most profitable regions and some of our branches there are even posting a profit. China is a market that we cannot give up,” the spokesperson said.
In 2011, E-Mart lost US$95 million on its China operations. It has not made a profit there since and in the first three months of 2015 it reported a $10.4 million loss.
Despite the company’s poor fortunes in China, E-Mart is planning to open its first store in Vietnam in December and is also targeting Mongolia.
Source: insideretail.asia
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