Despite aggressive promotions, Lotte Shopping's online shopping platform "Zetta" for Lotte Mart, launched in April, is struggling to expand its market share. The company threw down a gauntlet by rolling out the subscription-based unlimited free delivery service "Zetta Pass," but user growth has been minimal.
Lotte Mart is speeding up infrastructure expansion to boost Zetta's competitiveness. The plan is to invest about 1 trillion won by 2030 to build six online grocery automated logistics centers (CFCs) nationwide, expand the product lineup, and advance logistics.
According to Mobile Index by data tech company IGAworks on the 27th, Lotte Mart's Zetta app's monthly active users (MAU) last month totaled 602,318. That is a 27.67% decrease compared with April, when the Zetta app launched, at 832,706. Lotte Mart Zetta's MAU continued to decline to 663,843 in May, 631,533 in June, 649,572 in July, and 600,476 in August, staying at the low 600,000 range.
This is a lackluster figure compared with rival platform Emart app. The Emart app's MAU last month was 1,645,986, 173.2% higher than Lotte Mart Zetta. Emart app users have remained in the 1.6 million range, at 1,650,140 in April, 1,660,576 in May, 1,678,400 in June, 1,718,566 in July, and 1,646,493 in August.
Lotte Mart Zetta is an AI-based, online grocery shopping-only platform that Lotte Shopping launched in April after upgrading the existing "Lotte Mart Mall" app. It is also the first outcome released after more than a year of joint development following Lotte's partnership agreement with U.K. retail tech company "Ocado" in Nov. 2022. Lotte Mart Zetta includes features such as a "smart cart," which automatically adds products by analyzing customers' purchase history, spending tendencies, and buying cycles.
Powered by aggressive initial marketing and promotions, Lotte Mart Zetta reached 1 million cumulative downloads 100 days after the app's launch. However, the number of app users declined after April, when launch promotions such as discount events were held.
In response, Lotte Shopping launched the subscription-based delivery service "Zetta Pass" in August, making a bold move. Zetta Pass allows users to receive unlimited free delivery when they purchase products worth 15,000 won or more.
To that end, Lotte Mart said it operates same-day and scheduled delivery services three to four times a day and applies a cold chain (freshness maintenance) system to all vehicles to keep quality intact until delivery completion. Zetta Pass members also receive a 5% discount on a variety of new products released each week.
Zetta Pass is priced at 2,900 won per month, cheaper than Coupang Wow membership (7,890 won per month) and Baemin Club (3,990 won per month). First-time subscribers also get a one-month free trial. However, even after the launch of Zetta Pass, MAU saw only a slight increase.
Lotte Mart Zetta is pinning its hopes on the company's mid-to-long-term priority, the "Ocado Project." The core is to introduce Ocado's smart platform solution from the U.K. and invest 950 billion won by 2030 to build state-of-the-art automated logistics centers (CFCs) in six regions nationwide.
Lotte Mart broke ground on its first CFC in Busan in 2023 and is set to complete construction in the first half of next year. The number of items handled at the CFC is expected to increase to about 45,000, double that of existing online logistics centers. Lotte Mart also expects to strengthen logistics competitiveness through AI-based demand forecasting and inventory management, route and dispatch optimization, and product picking and delivery using robots.
However, there are also projections that competition will be tough with players such as Coupang, which is already leading the fresh grocery delivery sector after first building nationwide logistics infrastructure. Earlier, SSG.com of Shinsegae Group, which pursued a similar strategy, strengthened its fresh logistics business with its online-only logistics centers, Neo (NE.O), but, as losses persisted, sold the logistics centers and handed over some logistics services to CJ Logistics.
An industry official said, "In the online fresh grocery delivery market, strong players like Coupang and Kurly are already in place, making it difficult for latecomers to secure meaningful share," and added, "Only by achieving product and logistics competitiveness at a level that consumers can clearly feel will they become competitive."