|
Homeplus cstore chain in South Korea is one of Tesco’s key success stories in the global retail market.
Set up in 1999 as a partnership between Tesco and Samsung, Homeplus
generates sales of more than £3 billion and is one of the best
operations for profit margins. It includes 131 Homeplus Express
cstores, 111 hypermarkets totalling some 10m sq ft. By next year
Tesco hopes to become the biggest supermarket chain in South Korea
which has a population of 48m people. Currently the biggest
retailer in this sector is E-Mart, the home-grown rival, to gain
more than a third of the market.
“My ambition is to be the No 1 supermarket for quality in the world and
No 1 in size in Korea,” said Seung-Han Lee, the chief executive and
chairman of Homeplus and a Samsung veteran. While Homeplus
employs 23,000 staff only four of the staff are British. One is a
director and the others are middle management. Tesco has set up a truly
Korean business, run by Koreans, catering for Koreans, according to Lee.
Martin Uden, the British ambassador and author of several books on
Korea, also ascribes Tesco’s success to its ability to operate like a
local company. “They are not trying to sell PG Tips and digestives to
the Koreans — they are using their general retailing skills to apply
them over here,” he said. David Egan from CstoreWorld adds “Tesco
have learned from their historical errors made in overseas markets like
Ireland and France.
Uden also attributes a large part of the company’s success to Lee,
known as SH to Westerners. “He really is a force of nature — he knows
absolutely everybody,” Uden said. Lee, 62, who sits on the board of
First Bank Korea is a business celebrity, writing newspaper columns and
management books as well as heading the Chain Store Association, a
lobby group. He spent part of the 1990s as branch manager for
Samsung in London, living in Wimbledon. He held talks then with all the
big supermarket groups about the possibility of teaming up to launch a
new hypermarket chain in Korea.
Last year Tesco splashed out close to £1 billion on the acquisition of
36 stores from Carrefour, which traded as Homever. Since converting to
the Homeplus format, sales have soared by as much as 60%.
Homeplus stores feature clock towers mimicking Big Ben and Parliament.
“We call the business a customer parliament,” Lee said.
Nowhere is this better illustrated than in the hugely popular cultural
centres — in-store community education facilities that offer more than
650 classes every school term in subjects from English to Chinese,
cookery to ballet. Elsewhere in the stores there are
rest areas with seating and tables. There are even play areas for
children and cafés in the aisles where chefs cook noodles and other
tasty snacks for shoppers who can grab a stool and park their trolley
to enjoy instant refreshment.
These kinds of customer-focused features encourage huge loyalty,
according to Lee. Homeplus has attracted a staggering 13m members to
its loyalty card scheme — equivalent to more than a quarter of the
population. Within the business community Homeplus is quietly
working to change values too. In a society that has been traditionally
dominated by men, almost three-quarters of Homeplus’s graduate intake
this year are women. The company has also recently appointed its first
female regional store director.
CstoreWorld 060909
|
