[Alpha Biz=(Chicago) Reporter Kim Jisun] Jeju's retail industry is on edge as Costco, a large U.S. warehouse-type discount mart, heralds its landing in Jeju.

As e-commerce companies such as Coupang and Kurly are also making efforts in Jeju, the distribution war in Jeju is expected to intensify in the future.

According to the distribution industry on the 15th, Costco is currently in the process of obtaining a building permit after being selected as a preliminary operator for commercial facilities in Jeju Shinhwa World, a complex resort in Andeok-myeon, Seogwipo, in August. Costco plans to sign a formal contract with Ramjeong Jeju Development, which operates Jeju Shinhwa World as early as next year, and officially open it in 2026. It is known to have a floor area of 33,340 square meters with one basement and three floors above the ground.

Ramjeong Jeju Development appears to have joined hands with Costco considering that Jeju Island is one of China's favorite Korean tourist destinations and Costco's rapidly growing popularity in China. During this year's Lunar New Year holiday, China's Shanghai Costco store is so popular that it ranks first in sales among Costco stores around the world. As there are many Chinese tourists visiting Shinhwa World, they decided that it could create synergy.

However, Shinhwa Historical Park is an amusement park and requires construction permission from Jeju Island and consultations for the registration of large-scale stores in Seogwipo City. To this end, a prerequisite for regional co-prosperity is essential under relevant laws. Costco is reportedly considering selling products differentiated from local sales products, opening a window for agricultural products, supply contracts with local agricultural cooperatives, and hiring local residents first.

Costco's entry plan was announced, and the distribution industry has begun to revise its strategy so as not to miss existing customers. Coupang started rocket delivery in Jeju Island in 2021 and expanded to Coupang Eats Wow discount, which offers a 10% discount on food prices last month. kurly decided to promote pickup service using CU stores in convenience store CU and Jeju area. Currently, both kurly's daily delivery and Saetbyeol delivery are not possible in Jeju, so they are making detour inroads using the convenience store's sales network.

With the announcement of a fierce battle in the distribution industry in Jeju Island, the three existing large discount stores are also preparing for battle. E-Mart (139480), which operates two stores in Jeju City and one store in Seogwipo City, is expanding its specialized sales products in Jeju.

Since August last year, Lotte Mart has been renewing its fashion store to compensate for the lack of department stores and outlets in Jeju Island. We are operating 36 brands by attracting department store-level brands and upgrading the interior. Thanks to this, fashion sales increased by more than 30% until last month after renewal. Homeplus is focusing on customer marketing by holding special product planning exhibitions and various price events tailored to local characteristics.

 

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