Lotte Department Store has announced a major strategic pivot, committing 7 trillion won (about $5.07 billion) to expand its new “Time Villas” shopping mall brand. Revealed by CEO Chung Joon-ho at a Seoul press conference on October 23, the plan aims to establish 13 locations by 2030. This move signals a significant shift from traditional department stores to experience-focused shopping malls, targeting the evolving preferences of modern consumers in South Korea and beyond.
A Strategic Pivot Towards Experiential Retail
Lotte’s massive investment is a direct response to a fundamental change in how people view shopping. The company recognizes that modern retail centers are no longer just places to buy goods. Instead, they are becoming comprehensive lifestyle destinations.
“Shopping malls are evolving from simple retail spaces to environments where people eat, spend time, and enjoy a wide range of experiences,” CEO Chung Joon-ho explained. This vision is the driving force behind the “Time Villas” brand, which aims to create luxurious spaces where customers can spend their time in meaningful ways. The success of existing ventures like Lotte World Mall in Jamsil has given the company the confidence to double down on this experiential model.
The name “Time Villas” itself is designed to convey a sense of luxury and a new era of retail, where the experience of spending time is as valuable as the products purchased.
The ‘Time Villas’ Expansion Plan
The 7 trillion won investment will fund a rapid and extensive rollout of the Time Villas brand over the next several years. The goal is to have 13 locations operating by the end of 2030, transforming Lotte’s physical footprint across South Korea.
The expansion strategy includes a mix of brand-new constructions and major renovations of existing properties. The first Time Villas has already opened in Suwon, setting the stage for what’s to come.
The detailed plan includes:
- Four New Locations: Ground-up developments are planned for the major urban centers of Songdo, Suseong (Daegu), Sangam (Seoul), and Jeonju.
- Six Revamped Locations: Existing Lotte malls in Gunsan, Suwan, Dongbusan, Gimhae, Eunpyeong, and Suji will be completely overhauled and rebranded as Time Villas.
This ambitious project will be supported by collaborations with world-renowned architects, including Pritzker Prize winner Richard Meier, to ensure each location becomes an architectural landmark.
Reshaping Lotte’s Revenue Landscape
This strategic shift is set to dramatically alter Lotte’s business portfolio and revenue streams. The company projects a significant move away from its reliance on department store sales, which have historically been its core business.
Currently, department stores make up 75% of Lotte’s revenue. By 2030, Lotte expects its shopping mall revenue to surge from just 1% today to a substantial 30% share. This growth will come as the department store’s contribution is projected to decrease to 60%.
| Year | Department Store Revenue | Shopping Mall Revenue | Outlet Store Revenue |
|---|---|---|---|
| 2022 | 75% | 1% | 24% |
| 2030 (Projected) | 60% | 30% | 10% |
This forecast is based on starkly different growth expectations. While the department store sector is predicted to grow by a modest 2% annually, the shopping mall sector is expected to expand by a massive 17% each year.
Targeting the Modern Shopper
A key driver behind this strategic change is the behavior of the MZ Generation, those born between the early 1980s and early 2000s. According to Lotte, 79% of these younger consumers prefer to shop independently without sales assistance, a sharp contrast to older generations who valued personal service.
This generation seeks a holistic lifestyle experience, not just a transaction. Time Villas malls are being designed specifically to meet this demand. They will integrate fashion, food, entertainment, and cultural activities under one roof, creating destinations where people want to spend their entire day. Lotte is also planning to introduce unique brands, like Bacha Coffee, which focuses on high-end gifts, to provide differentiated content that appeals to these shoppers.
International Blueprint and Future Vision
Lotte’s confidence in this mall-centric strategy is bolstered by its recent international success. The Lotte Westlake mall in Hanoi, Vietnam, which opened in 2023, serves as a powerful proof of concept.
In its first year alone, Westlake Hanoi attracted 10 million visitors and generated 280 billion won in sales. This success has provided a clear blueprint for Lotte’s future growth, demonstrating the high potential of mixed-use shopping malls in international markets. CEO Chung confirmed that the company will continue to explore opportunities abroad.
Ultimately, the vision for Time Villas is to create much more than just a place to shop. By integrating affiliates like Lotte Hotels and Lotte Trading, the company aims to build multi-use complexes that serve as destinations for entertainment, leisure, and even travel, setting a new standard for the future of retail.
