As online retail channels rise and offline big-box stores struggle, Emart's warehouse-style discount store Traders Wholesale Club (hereafter Traders) is serving as a pillar for results on the back of steady sales and profitability.
Since opening its first store in 2010 and steadily expanding locations, Traders has emerged as a grocery channel known for large quantities and low prices, offering strong value for money (price-to-performance). Aside from Costco, there is no clear competitor in Korea. Emart added two Traders stores this year and plans additional openings next year and the year after.
According to related industry sources on the 11th, Emart posted sales of 7.4008 trillion won and operating profit of 151.4 billion won in the third quarter of this year. Compared with a year earlier, sales fell 1.4% and operating profit rose 35.6%. Within that, the Traders institutional sector recorded sales of 1.0004 trillion won and operating profit of 35.2 billion won. Sales rose 3.6% year over year, surpassing 1 trillion won in quarterly sales for the first time. During the same period, operating profit increased 11.6%.
Despite a slump in offline retail, Traders' sales and operating profit have steadily increased, making it the fastest-growing among Emart's various business units. On a cumulative basis for the first to third quarters of this year, Traders recorded sales of 2.8674 trillion won and operating profit of 112.7 billion won, up 5.7% and 26.9%, respectively, from a year earlier. The operating margin was tallied at 3.93%.
During the same period, Emart's discount store (big-box) institutional sector posted sales of 8.783 trillion won and operating profit of 98.6 billion won. Compared with a year earlier, sales fell 0.9% and operating profit rose 52.2%. The operating margin was around 1.12%.
Emart launched its warehouse discount business by opening the first Traders store in Yongin, Gyeonggi Province, in 2010. At the time, Traders billed itself as a "warehouse discount store accessible to anyone without membership," drawing attention with a bold model that did not charge annual fees. Since then, Traders has steadily opened locations, focusing on the Seoul metropolitan area and major cities nationwide. This year, it opened the Magok store in Seoul in February and the Guwol store in Incheon in September, bringing the total number of stores to 24.
Traders is known to offer prices that are more than 10% cheaper than ordinary big-box stores in exchange for selling large-quantity products. It also imports overseas direct-sourcing products not available in Korea by the container to broaden customer choice.
Traders has also secured a stable base of demand by selling more than 150 types of daily necessities at low prices through its private brand (PB) "T Standard," introduced in 2020. In the third quarter of this year, sales of T Standard products rose 25% from a year earlier.
The lack of a clear competitor other than Costco is also cited as a reason for Traders' strong performance. Costco opened its first branch in Yangpyeong-dong, Yeongdeungpo District, in 1994 and currently operates 20 stores. Although Emart Traders started about 20 years later than Costco, it now has more stores than Costco.
Lotte Mart also operates a warehouse discount store, but business expansion has stalled in recent years. Lotte Mart opened its first warehouse discount store, VIC Market, in 2012 in Doksan-dong, Geumcheon District, Seoul. It subsequently rolled out the Hwaseong Yeongtong store, Seoul Yeongdeungpo and Dobong stores, and the Ilsan Kintex store, but in 2020 it closed three locations, citing weak results.
Afterward, in 2022 Lotte Mart rebranded VIC Market as Lotte Mart Max and laid out a blueprint to expand the number of Max stores nationwide to 20. However, further expansion has barely materialized due to financial burdens. Currently, only six locations are operating: Seoul Yeongdeungpo and Geumcheon, Changwon Jungang in South Gyeongsang, Gwangju Sangmu, Mokpo in South Jeolla, and Jeonju Songcheon.
An Emart official said, "Both of the new stores opened this year turned a profit from the first month, establishing themselves as successful store models," adding, "We are preparing additional openings mainly in regional cities without existing locations."