The number of users of Lotte Mart's online grocery shopping application Zetta, which struggled as users quickly dropped off right after its launch last year, has recently rebounded. As Lotte Mart began operating the Zetta Smart Center Busan last month after investing about 200 billion won and rolled out intensive promotions in the Busan and South Gyeongsang regions, the pace of user growth appears to be picking up.
However, the gap with rival online grocery platforms such as Kurly and SSG.com remains wide. A key task ahead is to expand the user base by turning large-scale logistics investment into actual order growth and higher repeat purchases.
According to Mobile Index by artificial intelligence (AI) tech company IGAworks on Sept. 4, Lotte Mart's Zetta recorded 863,071 monthly active users (MAU) last month. That was up 43.7% from the same month a year earlier (600,476). MAU refers to the number of unique users who used the app at least once in a month.
Zetta is an online grocery platform that Lotte Mart introduced in April last year by revamping its existing Lotte Mart Mall. Thanks to various promotions in its launch month, it recorded an MAU of 832,706, but users quickly churned afterward. The figure fell to 663,843 in May last year and 631,533 in June, and dropped to 600,476 in August. It remained at 602,318 in September, underscoring the difficulty of retaining early users after launch.
This year, however, the trend has shifted. Zetta's MAU rose for four straight months, reaching 752,363 in May, 808,878 in June, 824,302 in July, and 863,071 in August. The growth pace also outstripped rival platforms. Last month's year-over-year MAU growth rate was 43.7% for Zetta, exceeding Kurly (37.6%), SSG.com (17.8%), and Coupang (5.5%).
In particular, Lotte Mart's aggressive marketing to win new customers around the Busan and South Gyeongsang regions, launched alongside the start of Zetta Smart Center Busan last month, appears to have yielded some results. The center, which drew an investment of about 200 billion won, incorporates automated logistics technology from U.K. Retailtech company Ocado. A key feature is the automation of much of the process from receiving and storage to ordering, picking, and shipping. Lotte Mart said its goal is to target about 4 million households in the Yeongnam region through the center.
Along with the center's launch, Lotte Mart also ramped up region-specific marketing. Starting on Aug. 20, it began TV ads and social media (SNS) marketing targeting consumers in Busan and the Yeongnam region, featuring former Lotte Giants baseball player Lee Dae-ho as a model. The strategy leverages a baseball star symbolic of Busan to highlight Zetta's delivery competitiveness to local consumers.
Price promotions to attract new users are also underway. Since Aug. 24, Lotte Mart has offered discounts of up to 50% on more than 300 fresh food and daily necessity items for new customers. From Aug. 27, first-time buyers in the smart center delivery areas of Busan, Gimhae, Changwon, Tongyeong, Jinju, and Geoje receive discounts of up to 15,000 won and three months of free delivery with Zetta Pass. At Busan Sajik Stadium, it also held a Zetta Match Day tied to a professional baseball game.
Still, Zetta significantly trails major rival platforms in absolute user scale. Last month, Kurly's MAU was 4,779,331, about 5.5 times Zetta's, while SSG.com's was 2,851,774, 3.3 times higher. Although direct comparison is limited because Coupang's product lineup and service scope differ greatly from Zetta's, its MAU reached 35,949,122.
A distribution industry official said, "At a time when many retailers run online services using external logistics networks, Lotte Mart's decision to build its own logistics infrastructure can enhance its mid- to long-term competitiveness," adding, "However, since its user base is still smaller than competitors', the key will be to continue investing while boosting order volume and repeat purchases to achieve economies of scale."