Balanced On-Offline Growth... Q2 Consolidated Operating Profit 187.4 Billion KRW, Sales 1.8771 Trillion KRW
Digital Strategy Success in NFT and App Content... Continued Sales Growth from MZ Customers
[Asia Economy Reporter Yuri Kim] Shinsegae recorded its highest-ever second-quarter performance this year, driven by balanced growth in both online and offline sectors. The growth in offline scale following the lifting of social distancing measures, digital strategies to enhance future competitiveness, and record-high performance of consolidated subsidiaries contributed to both external growth and internal stability.
Shinsegae announced on the 10th that its consolidated operating profit for the second quarter of this year reached 187.4 billion KRW, a 94.7% increase compared to the same period last year. This is the highest second-quarter performance ever, surpassing market consensus (forecasts). During the same period, sales increased by 34.5% to 1.8771 trillion KRW, and net profit rose by 394.1% to 82.3 billion KRW. The cumulative results for the first half of the year also marked the highest ever for that period, with cumulative sales of 3.6436 trillion KRW and operating profit of 351 billion KRW.
The department store business saw sales increase by 25.5% to 623.5 billion KRW, and operating profit grew by 80.6% to 121.1 billion KRW (including separate corporations in Gwangju, Daegu, and Daejeon). The reopening-driven renewal of the fashion categories (women’s and young fashion) at the Gyeonggi branch and the rapid stabilization of the new store (Daejeon Shinsegae Art & Science) led to strong offline sales growth centered on popular categories such as women’s fashion (34.2%), men’s fashion (34.7%), and outdoor (43.6%).
Results from digital transformation strategies also appeared. In the second quarter, Shinsegae Department Store’s online sales grew by 12.2% compared to the previous year. Shinsegae stated, "The introduction of non-fungible tokens (NFTs) using the industry’s first proprietary character, enhancement of mobile application content such as travel and self-development, and the opening of new specialty sections in the SSG.com Shinsegae Department Store mall contributed steadily to growth in the digital sector." The NFT using the retail industry’s first proprietary character, Poovilla, was sold out within one second of minting (sale), gaining popularity. As of the second quarter, the number of mobile app users for Shinsegae Department Store increased by 137.0% year-on-year to 6.2 million.
Offline sales from customers in their 20s and 30s grew by 38.0% compared to the previous year, and Chicor.com also recorded a growth rate of 67.6%, indicating increased customer interest in the "Shinsegae" brand. Shinsegae plans to continue its strong performance in the second half of the year based on new online and offline content, including the renewal opening of the young fashion specialty section at the Gangnam branch and strengthening luxury content on SSG.com.
A Shinsegae official said, "Thanks to the innovative growth of the department store, which is presenting a new distribution paradigm such as digital transformation, and the strong performance of subsidiaries, we are continuing to achieve record-high quarterly results." He added, "We will achieve even better results in the second half of the year based on the Gangnam branch renewal, strengthening of specialty sections in the SSG.com Shinsegae Department Store mall, and solid growth of subsidiaries such as Shinsegae International and Shinsegae DF."
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