[People人] Embracing Baseball Teams, Shinsegae Opens New Distribution to Captivate MZ Generation

Chung Yong-jin, Vice Chairman of Shinsegae Group, Acquires Professional Baseball Team SK Wyverns
First Step of 'Bold Thinking'... Aiming for Synergy with Existing Retail Business
Baseball Stadium Enhanced with Cultural Facilities... Innovation Expected in Post-Corona Era

[Asia Economy Reporter Jo In-kyung] "I ask you to challenge with bold thinking that can achieve sustained growth for 10 or 20 years and change the game."

Jung Yong-jin, Vice Chairman of Shinsegae Group, has taken the first step of the ‘bold thinking’ he urged employees to adopt in his New Year's message by deciding to acquire a professional baseball team. Although this move signifies breaking away from the limits of the distribution industry, concerns remain over the acquisition price of 135 billion KRW amid ongoing uncertainties in the distribution sector due to the COVID-19 pandemic.

◆Falling down and getting back up to ‘break through limits’= Vice Chairman Jung has consistently emphasized that marts and department stores should not be mere places for buying and selling goods but spaces that pursue ‘enjoyment’ like amusement parks or theme parks. This is because simply piling up many products and attracting customers cannot surpass online shopping. While pursuing both products and fun, painful failures such as the huge deficits and withdrawal of ‘Pierrot Shopping’ and the sluggishness of the drugstore ‘Boots’ deepened Vice Chairman Jung’s concerns. Despite consecutive failures and difficulties in the distribution industry, he has made bold investments. In Hwaseong, Gyeonggi Province, he is pushing forward with the construction of a theme park covering about 4.18 million square meters (about 1.27 million pyeong).

◆A CEO who communicates directly with the MZ generation= Jung, who communicates with the public through Twitter and Instagram, recently appeared in Emart’s YouTube advertisements and showed himself cooking ready-made meals from affiliated companies, aiming to capture the MZ generation (people in their teens to 30s). The recent baseball team acquisition also focused on the fact that the strong fan base of professional baseball overlaps with the leading customer base of the online market.

Just as Kim Taek-jin, CEO of NCSoft who led the founding of NC Dinos, is called ‘Taekjin hyung’ by the MZ generation, Vice Chairman Jung is also establishing himself as a new icon for the MZ generation. Since news of Shinsegae’s acquisition of SK Wyverns broke, many netizens have visited Vice Chairman Jung’s Instagram to request "Please name the new team ○○○" or suggest new emblems and characters for the team, showing a friendliness unlike other owner-managers.

Jung Yong-jin, Vice Chairman of Shinsegae, appeared on the Emart YouTube channel.

◆A new baseball stadium unlike any before= Shinsegae Group officially announced the acquisition of SK Wyverns the day before, stating, "This decision aligns with preparing for the future through the integration of online and offline led by Emart and SSG.com." With professional baseball entering an era of 8 million spectators, they believe that combining the expanding fan base with Shinsegae’s existing customers will enable various ‘extensions of customer experience.’ They also expressed expectations to contribute to the qualitative and quantitative development of professional baseball by shifting from ‘watching baseball’ to ‘enjoying baseball,’ and to make fans ‘Shinsegae fans’ even outside the stadium.

They declared their intention to transform the baseball stadium into a ‘lifestyle center’ where various services gather. Vice Chairman Jung, a baseball fan, has reportedly paid great attention to new types of stadiums that combine restaurants, shopping, lodging, and recreational and sports facilities, such as the Atlanta Braves’ home ‘Truist Park’ in the U.S. and the Rakuten Golden Eagles’ ‘Miyagi Stadium’ in Japan. A plan to build a dome stadium linked with Starfield in the Cheongna area of Incheon is also strongly proposed.

◆Concerns over acquisition cost burden= The enormous acquisition cost is somewhat burdensome. Emart supported the hotel business, which suffered due to COVID-19, with 370 billion KRW last year and has been expanding additional businesses such as theme parks and Starfield. Adding the baseball team acquisition raises concerns that cash flow might be strained. The fact that the baseball team itself is a deficit business is also a burden.

In his New Year's message, Vice Chairman Jung said, "This year will be a year in which the competitive environment of the market will be rapidly reorganized," and emphasized, "We must abandon the past inertia of ‘just not losing the fight’ and adopt confident, bold thinking that changes the game with the determination to ‘definitely win.’" This bold first step into the sports field beyond distribution raises expectations for a decisive match to see whether it can lead innovation in the new distribution market in the post-COVID era.