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Offline retail giants look to lure regional shoppers on potential spending uptick

Published: 23 Jun. 2025, 18:58 Updated: 23 Jun. 2025, 19:34

A render of Connect Hyundai Cheongju [HYUNDAI DEPARTMENT STORE]

Major offline retailers in Korea are accelerating efforts to expand into regional markets by launching multiuse shopping complexes, as they attempt to counter the dual challenges of e-commerce competition and a sluggish domestic economy.

Industry watchers view the push as a pre-emptive investment aimed at capitalizing on a potential rebound in consumer sentiment.

Hyundai Department Store is currently leading this regional push.

The company announced that it will hold a three-day soft opening starting Tuesday for its new complex, Connect Hyundai Cheongju, in Cheongju, North Chungcheong, ahead of the official opening on Friday.

The brand debuted in Busan in September of last year and positions itself as an urban shopping mall with a focus on the local area.

The Cheongju complex will introduce several brands that previously had no local presence, including Musinsa Standard, Ikea and Nitori.

“We aim to create the hippest cultural complex full of experiences and activities that bring new energy to the region,” said Jeong Jae-hoon, manager of Connect Hyundai Cheongju.

Hyundai also plans to open two additional complexes — The Hyundai Busan and The Hyundai Gwangju — by 2027.

These will be developed as “hybrid malls” combining department stores and outlets. The outlet sections will feature trend-sensitive outdoor brands, while the department store areas will focus on premium and luxury products.

Shinsegae, another retail giant, is expanding Starfield Village, a scaled-down version of its Starfield brand.

These community-focused commercial centers measure around 33,000 square meters (355,209 square feet) and include grocery stores and cultural spaces for hobbies and classes.

Shinsegae plans to launch 30 Starfield Village branches nationwide by 2033 and will introduce new full-scale Starfield malls in cities such as Changwon, South Gyeongsang and Gwangju.

Retailers attribute the aggressive mall expansion to rising consumer sentiment.

The Bank of Korea reported that the consumer confidence index reached 101.8 in May, up 9 points from the previous month and the highest since October 2024.

The Starfield Suwon in Suwon, Gyeonggi [JOONGANG ILBO]

As political uncertainty eases under the new administration, analysts expect further improvements in consumer outlook.

Retailers expect that a full economic recovery could unlock significant growth in regional markets that have remained relatively subdued.

They aim to attract a broad range of consumers through hybrid malls that combine the characteristics of department stores and outlets, tailored for regional demand.

“After streamlining less profitable locations, the industry is now preparing for a new phase of strategic expansion,” a retail industry source said. “We plan to target key commercial areas in regional cities in advance to prepare for a rebound in spending.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KIM KYUNG-MI [[email protected]]