[News Space=Reporter seungwon lee] Shinsegae Group Chairman Chung Yong-jin declared “full resumption of growth” on the occasion of his “first anniversary in office.”

 

After being promoted to chairman on March 8, 2024, Chairman Chung laid the foundation for Shinsegae Group’s leap forward through high-intensity innovation. He worked hard and achieved visible results in the form of increased store visitors and improved performance in a short period of time. Chairman Chung’s bold and frequent personnel changes also heightened organizational tension.

 

Based on this, Chairman Chung now plans to further maximize the competitiveness of the main business and step on the pedal for substantial growth.

 

The growth strategy is divided into a ‘two-track’. Market-leading affiliates such as E-Mart and Starbucks are competing to gain market dominance that cannot be surpassed by competitors.

 

The plan is to completely normalize the business units, including e-commerce and construction, where Chairman Chung worked hard to eliminate insolvent elements last year, and lay a solid foundation for growth this year.

 

■ E-Mart opens 3 locations this year and 3 more⋯ Accelerates the evolution of ‘spaces that customers intentionally seek out’

 

The leader in resuming growth is E-Mart. Chairman Chung showed his will to manage responsibly and his confidence in improving performance by purchasing a 10% stake in E-Mart from Shinsegae Group Chairman Lee Myung-hee last month.

 

Following Traders Magok, which opened in February, E-Mart will open E-Mart Food Market Godeok in the first half of the year. In the second half, it plans to open Traders Guwol in Incheon. This year, it will open three stores in the metropolitan area, the largest commercial area.

 

The number of E-Mart stores, including warehouse discount stores Traders, peaked at 160 in 2020 and has been declining since last year. Chairman Chung and other group executives believe that the system for efficient store operation has been completed and are resuming external growth this year.

 

E-Mart Everyday, which became one in July last year, is also planning to open more than 20 franchise stores this year to secure stable profits.

 

Chairman Chung said, “The worse the economy is and the more chaotic the market situation is, the more we must strengthen our core business competitiveness and develop an overwhelming dominance that our competitors cannot surpass.” As E-Mart’s largest shareholder, Chairman Chung will exercise strong leadership to expand the super-gap dominance.

 

E-Mart plans to open three more new stores by 2027, following the three it opened this year. It is also planning to secure at least five new sites for new store construction.

 

Many of the new stores opening this year, including two, are being planned as Traders. Traders, which Shinsegae Group predicted the market change and first launched in 2010, is currently the largest warehouse discount store in Korea.

 

Chairman Chung sees Traders' move as a decisive blow to widen the gap with competitors and plans to further accelerate expansion.

 

E-Mart is not simply focusing on increasing the number of stores. As of 2025, only a small number of people will be able to shop at offline stores. Therefore, Shinsegae Group's core mission is to make stores a touchpoint where customers 'wish to go out of their way'.

 

To this end, E-Mart plans to continuously increase differentiated stores such as food markets. Following the first food market opened in Suseong, Daegu last year, the Godeok store opening in the first half of the year will also be a food market. The 'mall type conversion' through store renewal will also continue to expand.

 

In order to continuously open and renew stores, securing profitability is essential. To this end, we will increase the integrated purchasing synergy encompassing E-Mart, Everyday, and Traders. In addition, we will provide customers with benefits that they can clearly feel through ultra-low-price products such as ‘GoRaeItTem’ and ‘Price Breaking Declaration.’

 

Starbucks, which exceeded 3 trillion won in annual sales last year, continues to expand its dominance. Starbucks' sales volume is the third largest in the group, following E-Mart and Shinsegae Department Store. That's how significant its significance is within the group.

 

Starbucks is opening more than 100 new stores this year. It also plans to expand its special stores, which are continuing their 'big hit'. The special stores are composed of 'THE stores' that open in scenic spots such as Jeju and Uiamho, and 'concept stores' that open in unique spaces such as traditional markets and old houses. There are currently 11 stores nationwide.

 

Chairman Chung said, “We will create ‘Starbucks Korea’ by having ‘Korean Starbucks’ with unique Korean themes.”

 

■ 'Organic collaboration possible because it is a new world' to improve business groups and get them back on track

 

The task that Chairman Chung immediately focused on after taking office a year ago was to reorganize business groups that needed improvement, such as e-commerce and construction.

 

Representative examples include the dismissal of the CEO of Shinsegae Construction, the simultaneous replacement of the heads of SSG.com and Gmarket, and the enhancement of logistics competitiveness through collaboration with the CJ Group.

 

After eliminating the crisis factors, Chairman Chung plans to create the 'first year of complete normalization' to lay the foundation for growth again.

 

First, SSG.com, which achieved its first annual EBITDA surplus last year, is accelerating profitability improvement and strengthening logistics competitiveness. SSG.com is rapidly expanding its delivery coverage through CJ Korea Express’s 700 nationwide logistics infrastructures. It started early morning delivery in the Chungcheong region in December last year and expanded its scope to Busan and Daegu in February this year.

 

Gmarket is establishing a joint venture with Alibaba International to create synergy with the global platform. It is expected that Gmarket’s product power will be added to the global big tech company with excellent IT capabilities, and it will be able to leap forward as a business that will bring a new wind to the domestic and international e-commerce market.

 

Currently, a business combination report for the establishment of a joint corporation has been submitted to the Fair Trade Commission. The establishment of the JV will be completed once the Fair Trade Commission completes its review and the court approves the contribution in kind.

 

Establishing joint ventures with overseas companies and forming strategic collaborations with logistics specialists are also new challenges that Shinsegae Group has chosen to survive in the rapidly changing e-commerce market.

 

Chairman Jeong said, “To overcome difficult situations, we need to think outside the box, and in particular, active collaboration with external parties can be a catalyst to change the flow of the market.”

 

Shinsegae Construction plans to establish a more efficient management decision-making system and more quickly pursue a mid- to long-term business portfolio establishment strategy following the delisting in February.

 

Last year, Chairman Chung led organic coordination among group affiliates to rebuild Shinsegae Construction. He also put his will to normalize the company into practice by appointing Vice President Heo Byeong-hun of the Management Strategy Office as the new CEO of the company immediately after taking office.

 

E-Mart 24 aims to continue the trend of improving its operating losses in the third and fourth quarters of last year. The decisive weapon is 'No Brand', which is the result of condensing the competitiveness of Shinsegae Group's core business.

 

E-Mart 24 surpassed 1,000 'non-brand product introduction stores' early this year. The average daily sales of non-brand stores are 38% higher than the average of all stores, showing remarkable results. E-Mart 24 plans to expand the number of non-brand stores to 2,500 by the end of this year and to 4,000 next year, so that more than 60% of all stores will sell non-brand products.

 

Chairman Chung also plans to continue the performance-oriented personnel policy for growth.

 

After taking office, Chairman Jeong boldly and quickly carried out personnel changes in a departure from past practices. This led to improved performance. Group members are determined to “run again for a leap forward.”

 

Chairman Chung said, “In order to enhance the group’s essential value of customer satisfaction and step on the accelerator for growth, personnel management based on new rewards and punishments is essential.” He added, “We will provide appropriate compensation to members of the organization who have achieved results through change and challenge, and continue to encourage innovation.”