As of December 2025, the domestic e-commerce market is constantly evolving, creating new consumption patterns. Lotte ON, in particular, is strengthening its unique position through customer-centric innovation amidst these changes. Moving away from its past strategy focused on outward expansion, it is accelerating profitability improvement by transforming into 'vertical commerce' specializing in specific categories such as beauty and fashion. This is a significant endeavor by Lotte ON to transform into a future-oriented shopping platform that deeply penetrates customers' lifestyles, going beyond simple product sales. We will conduct an in-depth analysis of the latest trends and changes in consumption patterns for Lotte ON to meet the evolving digital environment and rising customer expectations.
Online shopping has now evolved beyond simply searching for and purchasing necessary items to become an experience that 'knows me.' Lotte ON is enhancing its artificial intelligence (AI)-based hyper-personalization recommendation system to accurately understand the tastes and interests of each individual customer. The core lies in analyzing customers' past purchase history, search patterns, and even cart data to predict latent needs and proactively suggest customized products. This 'discovery commerce' naturally leads customers to explore and purchase items they hadn't initially intended, acting as a crucial factor in simultaneously boosting Lotte ON's customer satisfaction and purchase conversion rates.
In 2025, live commerce has firmly established itself as a key trend in the domestic e-commerce market. Lotte ON is also maximizing customers' shopping immersion by strengthening real-time communication and entertainment elements through live commerce. The ability for sellers and consumers to engage in Q&A in real-time, gain vivid product information through demonstrations, and access special benefits offered for a limited time induces immediate purchases. The influence of live commerce is particularly growing in vertical categories like beauty and fashion, where visual elements are important. Lotte ON is leading the market by providing differentiated content through professional hosts and influencers.
Leveraging Lotte Group's robust offline infrastructure, Lotte ON provides customers with a seamless shopping experience through its omnichannel strategy. It has become commonplace to pick up products ordered online at a nearby offline store, or to conveniently purchase products experienced in-store online. This offers customers a flexible shopping environment without the constraints of time and space, and it is evolving to maximize the strengths of offline stores, especially for specific items like fresh food. By integrating online and offline data, Lotte ON provides consistent and personalized services across all customer touchpoints, securing differentiated competitiveness.
With growing consumer awareness of environmental protection and social value, sustainable consumption has emerged as an important trend in the 2025 e-commerce market. Particularly among the MZ generation, there is a clear preference for brands' ESG management activities and eco-friendly products. Lotte ON is expanding its lineup of eco-friendly products in line with these value-oriented consumption patterns and actively attracting premium brands that emphasize transparency in their production processes. This strategy aims to provide a high-quality shopping experience by strengthening 'ON & THE LUXURY,' a specialized section for luxury and high-end brands, while simultaneously securing a customer base that values ethical consumption.
With the explosive increase in consumer demand to receive desired products 'right now,' the quick commerce market has grown to approximately 5 trillion won in 2025. Lotte ON is also maximizing customer convenience by enhancing its fast delivery services. Furthermore, the 'subscription economy' model, which provides regularly needed products on a subscription basis, is another major growth engine for Lotte ON. By expanding subscription services centered on frequently repurchased items like fresh food and daily necessities, it is increasing customer loyalty and establishing a stable revenue base. This service is optimized for the lifestyles of busy modern individuals and is expected to become the standard for the future consumer market.
In 2025, Lotte ON is successfully adapting to the rapidly changing e-commerce environment through personalized recommendations, live commerce, omnichannel integration, pursuit of sustainable values, and expansion of quick commerce and the subscription economy. In particular, the strategy of strengthening expertise in vertical categories like beauty and fashion and focusing on profitability improvement is showing positive results, bringing it one step closer to its goal of turning profitable in 2026. Going forward, Lotte ON will provide a 'shopping just for me' experience based on more sophisticated AI technology and customer data, and present innovative distribution models that break down the boundaries between online and offline. These efforts by Lotte ON are expected to set new standards for the future e-commerce market and offer customers a richer and more convenient shopping life.
Q1: What is Lotte ON's primary strategic focus for 2025?
A1: Lotte ON is focusing on improving customer satisfaction and profitability through a 'vertical commerce' strategy that strengthens expertise in specific categories like beauty and fashion, and AI-based hyper-personalization recommendations.
Q2: What is Lotte ON's 'Omnichannel' strategy?
A2: Lotte ON utilizes Lotte Group's offline store infrastructure to provide a flexible shopping experience without boundaries between online and offline, such as picking up products ordered online at stores, or purchasing online after experiencing products in-store.
Q3: What is the impact of Live Commerce on Lotte ON?
A3: Live commerce has become an important channel for Lotte ON to communicate with customers in real-time, deliver vivid product information, and induce immediate purchases with limited-time offers. It is particularly effective in the beauty and fashion categories.
Q4: How is Lotte ON responding to the sustainable consumption trend?
A4: Lotte ON is expanding its lineup of eco-friendly products, actively attracting premium brands that practice ESG management, and meeting the needs of customer segments that value social value.
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