This document summarizes the development of mobile commerce services at LOTTE.com. It discusses: 1. The development of the LECS e-commerce platform from 2010-2011 to better support brand online stores and enhance logistics services. 2. The improvement of LOTTE.com's mobile shopping site and launch of a Smart Pick mobile app from 2011-2012 to expand online-to-offline commerce. 3. How the Smart Pick service now allows customers to view product/store info, place online orders for in-store pickup, and receive promotions across LOTTE's retail brands.

1. 1. Established: January 2000
2. CEO: Kim Hyeong Jun
3. Address: Sampoong Building 10th
floor, Euljiro 4-ga, 158 Euljiro, Jung-gu, Seoul.
4. Business: E-commerce (LOTTE.com) and Proxy EC Service (LECS)
5. Number of Employees: 600
6. Homepage: www.lotte.com
7. Fields of Business: E-commerce.
-Korea's first Internet shopping mall business commenced in 1996
-Number of Members: 16 million people (As of March 2013) Total sales of 1,902 billion won in 2012.
-Consisted of LOTTE.com, Inc. operation and EC service.
1. Developmentof LECS(LOTTE.comE-Commerce Customizing Service)
platform version 2.0
● Project Title: Development of LECS platform: Platform Development and Site Application
● Project Duration:
1. LECS Platform 2.0: July, 2010 ~ February, 2011
2. On-line Store Commencement
Muji Korea on-line store (http://www.muji.com/kr/): January, 2011
3. Nike Korea on-line store (http://www.nike.co.kr/): February, 2011
4. Establishment of LECS Logistics service : June, 2010 ~ October, 2010
 Sponsoring Organization:
1. LECS business team, New Business Division, LOTTE.com, Inc.
2. SCM team, Sales Division, LOTTE.com, Inc.
● Performing Organization: New Business Platform Task Force Team, New Business Division,
LOTTE.com, Inc.
● Position/Name: Manager, Kang Heegoo
● Funds:
1. Developmental costs for LECS platform-based IT system: 1.19 billion won
2. Introduction costs for IT Infra (H/W, S/W): 2.56 billion won
3. Building costs for the new logistics system (LogiSmart): 160 million won
● Responsibilities and Project Output of Mr. Kang Heegoo
- Developed and completed the operating structure for the LECS platforms as a team leader and a

2. project manager.
1. Established IT infrastructure supporting the service platform structure to respond to various types
of EC business
- Standardized and improved the service operation and management process
- Defined and improved the EC common core module
- Constructed the LECS standard IT architecture
- Classified and systemically managed the LECS operating model
2. Built Stock-based order processing and logistics system for fast and accurate order processing
- Designed and established the logistics information system
- Managed the operation of logistics Center
- Launched solitary logistics center for UNIQLO’s online store
3. Developed and launched new stores
● Abstract
LECS - LOTTE Electronic Commerce Service
1. A proxy service to do all the operational tasks required for recognizable brands to run their
own online stores; Setting up and operation of online business sites, operation and
management of call center/logistics center,etc.
2. The necessity for recognizable brands to launch their own online stores: The normal product
sales from online store has been increased and created the need to strengthen the brand identity
accordingly. Growing number of customers has been requesting for the advanced services
(Shipping, Refunds, customer reception, etc). In addition, online stores don’t need to supply
and sell to general malls by adopting the One Store, One Price strategy. (Providing convenient
shopping process for customers, simplifying product operation)
3. Advantages: Customer companies can minimize the initial investment costs by using
LOTTE.com platform and reduce the fixed labor costs and can be provided with reliable high-
quality service
Business requirements in accordance with LECS business growth
1. Accommodating new online LECS stores on the rapid increase
2. Taking opinions from various business models and requirements by stores/brands
3. Advancing back-office functions for the enhancement of work efficiency
4. Constructing the base for the system linkage by brands/periods
5. Building Massive data and traffic processing capacity

3. Logistics requirements of the LECS business growth
1. Pre-securing a supply and preventing shortage for the improvement of customer satisfaction
2. Increasing customer satisfaction by shortening the product delivery time
3. Establishing logistics processes and systems considering the expandability
4. Strengthening the customer service by establishing SOA-based system and ensuring the
flexibility of the service with interlocking data
ㆍProject Output
Succeeded in establishing cost-effective/ high quality IT infrastructure, solitary logistics centers,
business processes and operational organization
1. Construction of SOA - based Platform through structurization and modulization
- Componentizing the business logic of commerce/Developing standard API that works in the
Common Services and Components to allow store developer or operator to setup new mall and
operate the mall efficiently.
- Developing LECS Platform Framework, Store Framework development, standard data model
for LECS 2.0 Store, standardized development guide
2. Building LECS 2.0-applied brand online store
-To build systems that can be expanded, policy information is managed by store unit. In case of
store expansion, separation of Service Instance, process/data expansion is permitted for
designing system structures so that the service can be applied according to the store-specific
policies.
A. Muji Korea on-line store (http://www.muji.com/kr/) launched its service: January 2011
B. Nike Korea on-line store (http://www.nike.co.kr) launched its service: February 2011
3. Construction of solitary logistics center for LECS
A. Introduction of new logistics system
1) Warehouse Management System (WMS), 2) Customer delivery processing system (BtoC
shipping)
 Contribution of Mr. Kang Heegoo
1. Establishment of SOA-based Platform

4. : In the LECS 1.0, there were no standardized modules and structured methods for store
development. Therefore, previously established LECS store lacked unified management, leading
to higher administrative costs. At the time of construction, stores had to pay excessive
developmental costs because recycling process for same functions didn’t exist. An appropriate
level of business infrastructure was created by adopting SOA (Service Oriented Architecture) as
LECS 2.0 standard architecture. It made it possible to minimize the risk with strategic agility by
modulizing service for recycling and building more efficient development process. Cost
reduction was realized through the creation of high-quality system.
2. Logistics System
- Setting up logistics process for Stock-based order processing
- LECS exclusive logistics centers allowed independent decision-making for LECS business
operations. As a result, it was possible to respond to customers swiftly and presented
independent capacity for business operation.
- Thanks to the operation of pre-planned logistics system, the mobility of logistics resources has
been increased by introducing the distribution resource planning
- By introducing/operating the systemic logistics system, LECS made flow-based logistics
management and exchanges of information on available inventory resources into its daily work
routine. Products are distributed for delivery immediately after receiving the order by
expanding the delivery capabilities. It ensured the improvement of customer satisfaction with
minimal cost and minimal inventory
-Secured logistics facilities to achieve LECS sales goals of 200 billion won in 2012 including
50 billion won of UNIQLO
2. Online-to-offline Smart Phone Mobile Commerce Service Project
1. Project Title: Smart Pick Mobile Application Service & Mobile Commerce Service : Development
& Deployment and Operation
2. Project Duration: From March,2011 to Feb, 2012
3. Sponsoring Organization: Lotte.com Co., Ltd, Republic of Korea
4. Performing Organization: Smart Pick Business Team, LOTTE.com (former name: New Business
Planning Team)
5. Funds: the internal budget

5. 6. Position/Name of Researcher:Team Manager and director, Kang Heegoo
7. Responsibilities and Project Output of Mr. Kang Heegoo
A. Improved the functions of mobile shopping sites (m.lotte.com) and expanded its sales: Device
adaptation – iOS, Android, Tablet
: Enhanced the payment service, adopted price discount function, shopping point and easy
credit card payment service
: Improved the shopping process – Offered memberships for customer service, extended
shop/category of displaying goods and established easy navigation system.
B. Extended Smart Pick service and developed its mobile application
: Expanded the scope of LOTTE department store(in terms of products and shops), designed
new operating process, adopted/improved the electronic coupon system to smart pick system,
Improved the service with branding strategy and extended the smart pick service by new
goods and stores
8. Abstract
LOTTE.com is online distribution company of LOTTE Corporation, Korea’s biggest distribution
corporate group. LOTTE.com commenced Korea’s first online shopping mall business and has
continued its operation since 1996. Total sales of 2011 reached to 1 trillion won establishing the
company as a leader of Korean Internet shopping market. LOTTE.com was decided to provide a new
shopping experience for the consumer by utilizing offline distribution base for mobile shopping. And
it worked on the development of appropriate mobile shopping application service for that object.
Mobile shopping has been expected to be divided into the smart phone version of the existing Internet
shopping mall and an O2O Cross Shopping, linking the online/offline stores, and developed separately.
O2O Cross shopping has become a major concern in the market expansion strategy of internet
shopping company. The shopping area has been expanded from online to online+ offline. Expansion
of O2O Cross shopping linking online to offline has become obvious trends in the mobile era. In this
sense, mobile shopping has greater significance to LOTTE corporate group, Korea’s largest
distribution company with the nation’s biggest number of offline malls.
9. Project Output
A. Improvement of m.lotte.com
The mobile shopping competition among big companies has begun since the launch of smart phones
in November 2009. As of March 2011, the number of smart phone distributed in South Korea reached
to 10 million devices and required the need to actively respond to the mobile shopping services.
However, LOTTE mobile shopping had only a rudimentary condition of service. In March 2011, the

6. mobile task force team was organized and started to work on the enhancements of mobile shopping
service. As results, tablet-optimized version of mobile shopping was realized. During the first stage of
the task, discount means and membership point were added to payment service to improve the
convenience of the mobile payment. Also, my team has developed a simple payment service, smart
pay, in cooperation with LOTTE Card. Inc. LOTTE.com introduced the mobile phone payment
systems from credit card companies and further applied the system to LOTTE.com Mobile. Starting
from July, the mobile task force was reorganized as/expanded to the smart pick team to continuously
improve the convenience of shopping process and increase the total sales of mobile shopping.
B. The development of Smart Pick Application
LOTTE.com launched O2O Cross shopping service in the name of Smart Pick Mobile Service. The
service was defined as "a tool to check out the products, stores and benefits before going to the malls”,
"a service to place an order on online/mobile shops and to pick-up the product in person from
department stores after checking its quality" and “a cart offering more benefits when purchasing at
offline stores.” To meet the above service definition, the following features have been included in the
smart phone applications. Firstly, it has a feature of introducing products from department stores,
supermarket/Mart and Road shop to customers. This feature includes using location data to show
stores nearby, introducing products of those stores and locating the place of the desired product from
the product/brand information database. Additionally, customers can check out promotional
information on corresponding product before the purchase. Secondly, it has a function of introducing
service goods. The smart pick service enables customers to pick up the service products at their
convenient time. Thirdly, E-coupon is issued as a means of using service product after receiving the
product. Consistent experiences are provided to customers by adopting smart pick-specific design.
Fourthly and lastly, smart pick application acts as a marketing tool for the offline store. Information
such as time sale can be used in conjunction with location-based information.
10. Contribution of Mr. Kang
During his employment, Kang Heegoo made LOTTE.Com, Inc. to be in a leading position in mobile
shopping. The year of 2011 was the time for online shopping to accommodate and develop a new
device, i.e. Smartphone in South Korea. The company required the competence of the IT-savvy
Director at that time. Based on such reality, the application has been designed as a form of service
combining web services within the framework of WebView. He also made various attempts to provide
convenient shopping services to customers. He has developed an easy payment service (Smart pay) in
affiliation with credit card companies and applied it to other businesses. In addition, Mr. Kang
continuously worked on the improvement of exhibition structure of mobile stores. Thanks to the
efforts of Kang Heegoo, the mobile shopping sales of LOTTE.Com, Inc, which was started as 100

7. million won in March of 2011, received the award of excellence in sales in January 2012 by
exceeding the projected earnings for the same period. In February of 2012, the company advanced to
report the earnings of 2.3 billion won over a year and reached the point of setting its target sales goal
of 60 billion won for the year. And it showed the highest annual growth in sales among the other
competitors of general shopping malls. With rapid growth in sales, the company had an aggregate
turnover of 5 billion won in May, June 2012. The company owed its success to the support of the
customers, fueled by its ongoing efforts to improve the usability, based on the continuous analysis of
traffic/sales mix and the numerical management with its consistent sales promotional efforts.
B. The development of mobile application for Smart Pick service, expansion of applicable business sector and
planning of new service.
As a project manager and service director, Kang Heegoo defined the functionalities of the service,
reviewed the technologies and chose its applicable targets to develop apps. The year of 2011 was the time
when a lot of discussion about the technology suitable for smart phone application was going on and the
development method was being attempted in various forms. Smart pick Service app is a tool for mobile e-
commerce connected to offline. And it is predicted that the service would show a different pattern of
use, unlike the games, entertainment, etc. Also, it was expected to require additional services with
a lot of new initiatives in operation. And it is predicted that the service would show a different pattern
of use, unlike the games, entertainment, etc. Also, it was expected to require additional services with a lot
of new initiatives in operation. The App Development Project began in April was completed in
September. The service was launched in local branches of LOTTE Department Store. At present, 2015, the
service has been developed to expand services. And it has become one of the main services of LOTTE.com
and is used as a tool for performing omni-channel strategy of the LOTTE Corporate Group.
i. Relevant articles on LOTTE.com Smart Pick Service
1) LOTTE Department store, expands its omni-channel service "smart pick" nationwide to 30 local
stores
From Naver news http://biz.chosun.com/site/data/html_dir/2015/04/12/2015041201469.html
Smart pick is the name of Omni-channel service launched by LOTTE.com in conjunction with
distribution affiliates such as LOTTE Department Store from 2010. If you use the smart pick service of
LOTTE’s affiliate companies -El LOTTE, LOTTE.com......
2) Order online and pick up at LOTTE Department Store ... Expansion of 'LOTTE smart pick "service
http://www.inews24.com/php/news_view.php?g_serial=878485&g_menu=022500&rrf=nv
Last month, LOTTE.com’s Smart pick service-relevant sales increased by 172 percent compared to
April last year when the service was renewed. And the number of downloads for the smart picks app

8. showed an increase of 224percent. In December, the number of orders also rose to 288 percent over
eight months since April last year……