Rising to Second Largest Shareholder with 'Bureung' Investment
Acquires 30% Stake in 'Pet Friends'
[Asia Economy Reporter Jo In-kyung] GS Retail, which was launched by merging convenience stores, supermarkets, online malls, and home shopping businesses into one, has embarked on a full-scale investment drive. The company is determined to maintain its leadership in the rapidly changing online and offline distribution market by investing in promising businesses that can create strategic synergies with existing operations and expanding its scale through large-scale mergers and acquisitions (M&A).
First Major Investment Move is 'Yogiyo'
According to the distribution industry on the 23rd, GS Retail is considering acquiring 'Yogiyo,' the second-largest delivery app in the market, in partnership with a global private equity fund. It is known that Affinity Equity Partners and Permira are participating in the GS Retail consortium. The valuation of Yogiyo, initially estimated at around 2 trillion won, has recently dropped to between 500 billion and 1 trillion won. GS Retail believes that combining Yogiyo's delivery expertise and infrastructure with its own 15,000 offline stores will generate significant synergy.
In April, ahead of the integration, GS Home Shopping invested in Mesh Korea, a startup operating the delivery service 'VROONG,' acquiring a 19.53% stake and becoming the second-largest shareholder. The company explained that in the rapidly changing commerce and logistics market, they chose Mesh Korea, which specializes in last-mile delivery based on about 400 small logistics hubs (VROONG stations) in major urban areas, as a differentiated service partner. Last month, they also launched 'Udeal-Order,' a delivery-only app for GS25 and GS The Fresh. They have already recruited 75,000 Udeal delivery workers, who mainly deliver on foot.
GS Retail expects that collaboration through such investments will strengthen quick commerce businesses such as same-day and instant delivery, enabling faster delivery of a wider variety of products to customers. With the surge in sales of meal kits and fresh products since COVID-19, they anticipate securing a broad customer base not only for convenience stores and supermarkets but also for home shopping, mobile, and live commerce in the future.
Business Diversification Targeting Lifestyle
On the 21st, GS Retail jointly acquired a 95% stake in 'Pet Friends,' the leading domestic pet specialty mall, together with the private equity fund 'IMM Private Equity.' GS Retail acquired a 30% stake.
GS Retail recognized the growth potential of Pet Friends early on and made its first investment in July 2017, followed by three additional rounds of investment. With the large-scale funding secured through investments from GS Retail and IMM PE, Pet Friends plans to evolve beyond a simple specialty mall into a pet lifestyle platform by partnering with leading companies and launching new services and brand collaboration products. Previously, GS Retail has continuously invested in various pet-related startups such as 'Dogmate,' 'Petpick,' 'Baraem System,' '21gram,' and its subsidiary 'Petsbee (About Pet)' to secure a leading position in the pet market and discover and introduce diverse services.
Through such business diversification and expansion, GS Retail aims to increase its annual transaction volume from 15.5 trillion won last year to 25 trillion won by 2025. Over the next five years, it plans to invest a total of 1 trillion won in digital commerce, infrastructure development, and new businesses.
A company official said, "Based on GS Retail's core competencies, we aim to provide differentiated customer value through the integration of online and offline commerce in a distribution market where boundaries are disappearing," adding, "We will actively pursue win-win investments and acquisitions that can create synergy through mutual know-how."
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