Coupang, Naver, Alibaba Experts Recruited
"Establish Offline Presence Online Too"
Merit-Based Rewards Realized... Possible Additional Personnel Moves Under Watch
On the 19th, Shinsegae Group carried out a major personnel reshuffle, replacing executives including the CEOs of its e-commerce affiliates Gmarket and SSG.com. The group recruited a large number of talents who have worked at leading domestic e-commerce companies such as Coupang, Naver, and Alibaba. Jeong Yong-jin, Chairman of Shinsegae Group, who has been in office for over 100 days, appears to be managing the business crisis through a strong personnel overhaul in underperforming business units. Since Chairman Jeong has signaled a 'reward and punishment' personnel policy for chronically unprofitable affiliates, attention is focused on further personnel changes.
On the same day, Shinsegae Group appointed Jeong Hyeong-gwon, former head of Alibaba Korea, as the new CEO of Gmarket. Additionally, Choi Hun-hak, Executive Director and Head of Sales at SSG.com, was promoted to CEO. The previous CEOs, Jeon Hang-il of Gmarket and Lee In-young of SSG.com, stepped down from their management positions. Both had joined Shinsegae Group after its acquisition of eBay Korea in 2021.
Recruitment of Competitors' Experts from Coupang, Naver, Alibaba, etc.
Jung Hyung-kwon, the new CEO of Gmarket, and Choi Hoon-hak, the new CEO of SSG.com. [Photo by Shinsegae Group]
The most notable aspect of this personnel change is the large-scale recruitment of external personnel with experience at Coupang, Naver, and Alibaba for Gmarket. Jeong Hyeong-gwon, newly appointed CEO of Gmarket and former head of Alibaba Korea, is known as a financial expert with experience across investment, e-commerce, and fintech industries. He served as head of Alibaba Korea and representative of Alipay Europe, Middle East, and Korea, and worked at Goldman Sachs, Credit Suisse, and as a financial executive at Coupang.
Shinsegae Group also recruited Oh Cham, a former Coupang executive, as head of the Tech division established within Gmarket's developer organization, and Kim Jeong-woo, formerly of Naver, as head of the PX division, equivalent to Chief Product Officer (CPO).
Coupang and Naver are the first and second largest players in the domestic e-commerce market, respectively, while Alibaba Group's direct purchase app 'AliExpress' has recently been rapidly growing in the Korean e-commerce market. The strategy is to increase influence in the e-commerce market by recruiting experts from competitors of Gmarket. A Shinsegae Group official said, "In a rapidly changing market, we recognized the need for overall innovation and profitability enhancement in the e-commerce business, so we selectively recruited external experts and internal personnel with experience from Coupang, Naver, and Alibaba Korea."
Regarding SSG.com, the group explained that it judged it effective for Executive Director Choi, who has been strengthening grocery and logistics competitiveness, to concurrently serve as CEO. The position of head of the D/I (Data & Infrastructure) division was assigned to Executive Director Ahn Jong-hoon, who was in charge of Emart's D/T (Digital Transformation). Shinsegae Group explained, "Following the platform logistics system overhaul through collaboration with CJ Group, we chose a complete change by simultaneously replacing key executives, thereby kickstarting new growth in the online business that had temporarily stalled."
Shinsegae's 'Renewal Blade' for 'Accumulated Deficit' E-commerce Business
This personnel change was made amid Shinsegae Group's consensus that change was necessary in the e-commerce business sector. The former CEOs of Gmarket and SSG.com, Jeon Hang-il and Lee In-young, joined when Shinsegae Group acquired Gmarket in 2021. These eBay Korea veterans notably survived the group's overhaul in September last year, when 40% of affiliate CEOs were replaced.
However, as Coupang expanded its dominance in the e-commerce market and Chinese C-commerce companies like Ali and Temu intensified their domestic advances, Gmarket and SSG.com failed to find a turning point. Gmarket recorded an operating loss of 32.1 billion KRW on a consolidated basis last year, while SSG.com posted an operating loss of 103 billion KRW on a consolidated basis. This heightened the group's sense of crisis, leading to the decision to implement a large-scale personnel overhaul.
Shinsegae Group plans to strengthen competitiveness in the e-commerce sector through this personnel change and establish a presence comparable to Shinsegae Department Store or Emart in offline retail. A group official said, "It is true that Shinsegae Group's e-commerce sector has not yet achieved the influence of its offline business. By enhancing competitiveness through top industry experts, we aim to kickstart new growth in the online business and further solidify our position as Korea's leading distribution company and market leader."
'100 Days in Office' Chairman Jeong Yong-jin Realizes 'Reward and Punishment' Through Frequent Personnel Changes
Since his promotion to group head on March 8, Chairman Jeong has been conducting frequent personnel changes based on the principle of 'reward and punishment.' Until now, Shinsegae Group had held year-end regular personnel evaluations to hold management accountable, but since Chairman Jeong's inauguration, disciplinary personnel changes have been made through frequent personnel reshuffles.
A representative example was the replacement of the CEO of Shinsegae Construction through a 'one-point personnel change' last April. Shinsegae Construction faced liquidity crises this year due to sluggish sales performance amid the real estate market downturn. It recorded an operating loss of 187.8 billion KRW on a consolidated basis last year, leading to Emart's first-ever annual operating loss as the parent company. Consequently, Shinsegae Group abruptly dismissed CEO Jeong Doo-young and appointed Heo Byung-hoon, Executive Vice President of the Management Strategy Office, as the new CEO.
The recent replacement of the SSG.com CEO follows a similar pattern. Five years ago, SSG.com invested approximately 1.1 trillion KRW with financial investors (FIs) and had conflicts over the exercise of put options. The parties agreed to sell the 30% stake held by the FI in SSG.com to a third party by the end of the year, but the financial burden on Emart, triggered by Shinsegae Construction, became more pronounced.
As Chairman Jeong continues frequent personnel changes, internal tensions within the group are intensifying. There are expectations that personnel overhauls may be extended to affiliates that have not improved performance, similar to Shinsegae Construction, Gmarket, and SSG.com.
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