[News Space=Reporter seungwon lee] CEO Heo Seo-hong, who has been leading GS Retail since the end of last year, is having a rough debut. 

Convenience store GS25 and home shopping GS Shop received poor performance last year, and with personal information leaks occurring one after another, a sense of crisis is spreading throughout the company.

As soon as Vice Chairman Heo Yeon-soo, who had been leading the existing management, stepped down and Vice Chairman Heo Seo-hong, the 4th generation owner, was appointed as CEO, a change in leadership after 9 years, noises began to flow. The analysis in the business world is that CEO Heo's crisis management ability and organizational leadership are being put to the test amid a series of bad news.

GS Retail suffered a hacking attack on its GS25 convenience store between December 27th last year and January 4th this year, resulting in the leak of personal information of 90,000 customers. However, another unfortunate incident occurred when the personal information of approximately 1.58 million customers was leaked from the home shopping company GS Shop. Considering the number of monthly active users, this is a serious situation where the information of nearly half of the customers was leaked.

GS Retail operates GS25 (convenience store), GS Shop (home shopping), GS The Fresh (supermarket), etc., and is a large distributor with approximately 20 million members, but consumer anxiety is increasing.

The personal information presumed to have been leaked through the GS Shop website this time is a total of 10 items: ▲name ▲gender ▲date of birth ▲contact information ▲address ▲ID ▲email ▲marital status ▲wedding anniversary ▲personal customs clearance code. Not only sensitive information such as name, date of birth, contact information, and address, but also personal customs clearance code was leaked, so there are concerns about secondary damage, which is a serious situation. 

Furthermore, GS Retail recognized the additional damage last week, but it is being criticized for being late in responding as it only notified the affected customers individually on the 27th.

Previously, on November 11 and December 31 of last year, when customers used GS Pay and other simple payment methods to purchase products at GS25 stores, there was a long period of time where payments were not processed properly. It is claimed that store owners suffered damages, especially when errors occurred on Pepero Day and at the end of the year, which are considered to be peak periods.The GS25 Franchisee Association also sent a certified letter to the GS Retail convenience store franchise headquarters, demanding "compensation for sales losses due to the GS25 payment system error and prevention of recurrence."

They said in a certified letter, “Due to a payment system error on November 11, 18,000 stores suffered a loss of sales, and although the head office promised to prevent a recurrence at the time, the same system error occurred exactly 50 days later on December 31.” They added, “We are demanding a calculation of the sales loss due to the error and a compensation plan accordingly.” The store owners are taking the position that they will not pay for the computer maintenance costs if the problem occurs again.

This is not the first time GS Retail has had issues related to personal information. GS Retail has been subject to sanctions from the Personal Information Protection Commission every year since 2022. It was fined 11 million won in January 2022, 6 million won in July 2023, and 7 million won in April 2024 for violating personal information security measures and safety measures.

If the cause of this hacking incident is revealed to be GS Retail's inadequate information protection measures, it will likely suffer the dishonor of being sanctioned by the Personal Information Protection Commission for the fourth consecutive year.

As the computer system issue and personal information leak occurred one after another, the burden on Heo Seo-hong, the new CEO of GS Retail, has also increased.

CEO Huh also presented a vision when he took office: “I will think about a strategic direction to continue sustainable growth in a rapidly changing distribution environment,” and “In particular, I will focus on strengthening the competitiveness of our core business and securing new growth engines in line with the era of digital transformation where the boundaries between online and offline are disappearing.”

However, as accidents continue to occur in the IT system sector, which is the most important in the era of digital transformation, CEO Huh's vision is being evaluated as an empty promise.

The successive incidents of convenience store GS25 and home shopping GS Shop have already taken a serious toll on consumer trust. Due to hacking, some customer IDs and passwords were found to have been used externally, and this incident clearly shows the laxity of the company's security system and data management, so it is being evaluated that it is not enough to restore the lost trust.

GS Retail's current situation is also reflected in its stock price. The stock price, which was well over 20,000 won at its peak last year, fell to 15,520 won on the 27th.

Experts point out that this incident was not simply a technical defect, but rather a result of the company’s lack of digital strategy and lack of investment in security. There are growing voices that say that, despite being a leading convenience store and home shopping company, the company was too focused on immediate profits and neglected important system maintenance and security enhancement.

A distribution industry insider said, “The market’s assessment of CEO Heo Seo-hong’s leadership could change depending on how he resolves issues at this point in his career,” and advised, “Rather than a stable strategy of maintaining the existing system, he should find a solution with the mindset of replacing everything through disruptive innovation.”

Meanwhile, CEO Heo Seo-hong is the eldest son of Samyang International Chairman Heo Kwang-soo and the 5th cousin of GS Group Chairman Heo Tae-soo.

Mr. Huh started his career as a researcher at the corporate finance department of Samjeong KPMG in 2002 and joined GS Home Shopping as a deputy manager of the new business team in 2005. He served as the head of the power and collective energy business division at GS Energy and the head of the management support headquarters, and then as the head of the future business team at GS Group, leading GS Group’s new businesses.

However, since GS Retail's new business investments have all ended in failure, it has been nicknamed the 'minus hand'. The failure of investments in delivery platform Yogiyo and delivery agency Mesh Korea is a given, and there are many cases of GS Retail's new business investments failing, including Pet Friends, Cookat, and Kakao Mobility, so the distribution industry is using it as a negative example.