Tesco Homeplus Virtual Subway Store in South Korea

Summary

Tesco Homeplus adapted to South Korea’s unique market by evolving its business strategy, changing its name, and aiming to become number two despite having fewer stores than its competitors. Recognizing that Koreans dread weekly grocery shopping, Tesco launched virtual stores in subway stations, allowing customers to shop using smartphones. This innovative approach increased online sales by 130%, grew membership by 76%, and helped Homeplus become number one in the online market, while still remaining close to the top in the offline sector.

Takeaways

• 😀 South Korea's market presents unique challenges and opportunities for international brands like Tesco.
• 😀 Tesco rebranded itself as 'Home Plus' to better adapt to the local Korean market.
• 😀 Despite having fewer stores than the leading competitor, Tesco aimed to become number one without increasing its physical store count.
• 😀 Research revealed that Koreans are highly hardworking and find weekly grocery shopping a burdensome task.
• 😀 Tesco's strategy focused on convenience for busy consumers by bringing the store to them.
• 😀 Virtual stores were created in high-traffic areas like subway stations to blend into people's everyday routines.
• 😀 These virtual stores displayed products just like a physical store, with the only difference being the ability to shop through smartphones.
• 😀 Customers could scan QR codes to add products to their online carts, which would then be delivered to their doors.
• 😀 The virtual store campaign allowed people to shop while relaxing after work or on weekends, without needing to visit physical stores.
• 😀 As a result, online sales saw a massive increase of 130%, with a 76% rise in new registered members.
• 😀 Home Plus became the number one player in the online market, demonstrating the success of its innovative approach.

Q & A

Why did Tesco change its name to Homeplus in South Korea?

Tesco changed its name to Homeplus in South Korea to better adapt to the local market and resonate more with Korean consumers.

What was the main challenge that Tesco faced in South Korea?

The main challenge Tesco faced was having fewer stores compared to the market leader, Art Mission, which made it difficult to compete for the top spot.

How did Tesco aim to become number one in South Korea despite having fewer stores?

Tesco aimed to become number one by focusing on a strategy that catered to the busy lifestyles of Korean consumers, allowing them to shop virtually without visiting physical stores.

Why do Koreans prefer not to grocery shop every week?

Koreans are known to be among the most hardworking people in the world, and grocery shopping once a week is seen as a dreaded and time-consuming task for them.

What was the idea behind creating virtual stores in subway stations?

The idea behind the virtual stores was to bring the store directly to the people, allowing them to shop easily using their smartphones while they were on the go, particularly in subway stations.

How did the virtual stores work for consumers?

Consumers could scan QR codes displayed at the virtual stores using their smartphones, add items to their online carts, and have them delivered directly to their homes after completing the purchase.

What was the expected benefit of allowing consumers to shop virtually?

The expected benefit was that consumers could shop more conveniently and efficiently, saving time and avoiding the need to physically visit a store, particularly during busy workdays or weekends.

What results did Tesco achieve through the virtual store campaign?

Through the virtual store campaign, Tesco saw a significant increase in online sales, with over 10,000 consumers visiting the online Homeplus Mall, a 76% rise in new registered members, and a 130% increase in online sales.

How did this campaign affect Homeplus's market position in South Korea?

As a result of the campaign, Homeplus became the number one player in the online market in South Korea and moved closer to securing the second position in the offline market.

What was the key factor that made the virtual stores successful in South Korea?

The key factor was the seamless integration of the virtual stores into people's everyday lives, allowing them to shop conveniently using their smartphones without disrupting their schedules.