Daesang Challenges Open Market... Strengthening Online Business

Added Business Purpose of Telecommunication Sales Brokerage at General Meeting
Officially Challenged Open Market 'Gambyeol Market'
Dual Operation with Existing Own Mall 'Jeongwon e-Shop'

Daesang is adding telecommunication sales brokerage as a new business and is challenging the open market business. As online shopping has become a constant and the influence of online distribution channels continues to expand, this move is interpreted as a determination to evolve into a comprehensive online platform operator with strengths in food, rather than limiting itself to operating its own mall that sells only its own products.

On the morning of the 22nd, Daesang held its regular shareholders' meeting at its headquarters in Jongno-gu, Seoul, and added 'telecommunication sales brokerage' to its business objectives. Telecommunication sales brokerage refers to a business that provides cyber malls or advertising means to mediate transactions between parties, such as open markets that connect product providers and consumers.

Im Jeong-bae, CEO of Daesang, is speaking at the 70th Annual General Meeting of Shareholders held on the 22nd at the headquarters in Jongno-gu, Seoul.

With Daesang adding telecommunication sales brokerage as a new business, the open market business is also expected to gain momentum. Earlier, Daesang filed a trademark application for a distribution platform called 'Gambyeol Market' with the Korean Intellectual Property Office in January, and it is expected to start operating Gambyeol Market within the first half of this year. Gambyeol Market is an open market-type online shopping mall that will be operated separately from the existing own mall ‘Jeongwon e-Shop’.

Gambyeol Market will operate by allowing third-party sellers to enter the online mall and sell products, with Daesang receiving brokerage fees for mediating transactions. This differs from Jeongwon e-Shop, which directly sells Daesang’s own products, as Gambyeol Market only handles sales brokerage. Currently, Jeongwon e-Shop has the concept of a food-specialized online shopping mall centered on Daesang’s own brands such as ‘Jongga’ and ‘Chungjungwon,’ whereas Gambyeol Market is expected to handle an expanded category of products including not only Daesang’s products but also other food brands, lifestyle, and home appliances, beyond Jeongwon e-Shop.

Daesang’s entry into the open market business is aimed at strengthening competitiveness in the online distribution market. By operating an open market-type online mall in addition to its existing own mall, it plans to increase the range of products handled and expand consumer touchpoints, thereby linking to profit improvement. The size of the domestic online shopping market has been rapidly increasing every year. According to Statistics Korea, the online shopping transaction amount for beverages and foodstuffs last year was 28.1508 trillion KRW, growing 252% over the past five years. Daesang also directly experienced the growth of online channels, with Jeongwon e-Shop’s sales last year increasing by about 25% compared to 2019.

Additionally, the creation of a new revenue model through brokerage fees is an attractive aspect for the company. Telecommunication sales brokerage is a business that mediates transactions as an online platform operator. It can earn brokerage fee income from e-commerce without incurring separate costs for inventory management and distribution sales. Moreover, by expanding its own sales channels, it can reduce dependence on existing large distribution channels and utilize data obtained through operating its own mall for marketing and new product development in various ways.

Besides the new platform business, Daesang is expected to strengthen the competitiveness of its existing Jeongwon e-Shop. Last year, Jeongwon e-Shop underwent a major renewal, strategically reorganizing product categories and opening separate brand-specific sites to make it easier to find listed products. This month, it introduced a 'Gift Sending Function' that allows users to send products by simply entering the recipient’s name and contact information, similar to KakaoTalk. This service was introduced in response to the expansion of the mobile gifting market. The service allows gifting of Daesang’s own brand products such as Chungjungwon and Jongga, as well as external listed products like Starbucks.

Daesang also revamped services to enhance user convenience. It increased the number of special offer products and decided to operate events by dividing the system into weekdays and weekends. Special offers now include not only Daesang’s products but also external listed products, and events with increasing discount rates based on purchase quantity were added. Son Young-hoo, head of Daesang’s mall business team, said, “We are building an optimized online shopping environment reflecting the latest shopping trends and customer expectations, and focusing on continuously enhancing our online capabilities. We will continue to strengthen services based on customer needs and provide differentiated purchasing experiences.”