1 Year Since Chairman Jeong Yong-jin's Inauguration: "Accelerating Growth by Strengthening Core Business Competitiveness"

Declaration of Full-Scale Growth Resumption
Achieving Overwhelming Leadership in Top Business Sectors and Complete Normalization in Improvement Sectors
Aiming to Establish a Foundation for Growth with a Two-Track Strategy

Jung Yong-jin, Chairman of Shinsegae Group, declared a 'full-scale resumption of growth' to strengthen core business competitiveness and solidify internal stability on the occasion of his first anniversary as chairman on the 8th.

According to Shinsegae Group on the 5th, the growth strategy envisioned by Chairman Jung is largely divided into two tracks. Market-leading affiliates such as Emart and Starbucks aim to leap forward with an overwhelming market dominance that competitors cannot challenge. Business sectors like e-commerce and construction, which Chairman Jung focused on last year to eliminate weak points, have set a goal to achieve complete management normalization this year and establish a solid foundation for growth.

Jung Yong-jin, Chairman of Shinsegae Group. Photo by Shinsegae Group

Emart to Open 3 New Stores... Evolving into 'Spaces Customers Intentionally Visit'

Last month, Chairman Jung purchased a 10% stake in Emart previously held by Lee Myung-hee, the General Chairwoman of Shinsegae Group. The company explained that this demonstrated his commitment to responsible management and confidence in improving performance.

This year, Emart plans to open the Emart Food Market Godeok branch in the first half, following the warehouse discount store Traders Magok, which opened last month. In the second half, Traders Guwol store will open in Incheon. This means three new stores will be introduced this year in the metropolitan area, the largest commercial district.

The number of Emart stores, including Traders, peaked at 160 in 2020 but has decreased until last year. Chairman Jung and the group’s top management have judged that the system for efficient store operation has been completed and will resume external growth this year. Emart Everyday, a corporate supermarket (SSM) integrated with Emart in July last year, will also open more than 20 franchise stores this year to secure profits.

Chairman Jung emphasized, "The worse the economy and the more chaotic the market situation, the more we must strengthen our core business competitiveness to build overwhelming dominance that competitors cannot challenge."

Emart plans to open more than three new stores by 2027. It is also planning to secure more than five new sites for store openings. Many of the new stores, including two this year, are planned as Traders stores. Since its debut in 2010, Traders currently operates 23 stores, ranking first in the number of warehouse discount stores in Korea. Chairman Jung sees Traders as playing a major role in widening the gap with competitors and has decided to accelerate its expansion.

Shinsegae Group has also set a core goal to transform offline stores, including Emart, into 'contact points that customers want to visit intentionally.' To this end, Emart plans to increase differentiated stores such as Food Markets. The 'mall-type conversion' through remodeling of complex shopping malls will also be expanded. To promote this, Emart will strengthen profitability through integrated purchasing covering Emart, Everyday, and Traders, and expand ultra-low-price product lines that enhance customer benefits such as 'Whale Items' and 'Price Shock Declaration.'

Starbucks, which exceeded 3 trillion won in annual sales last year, will also expand its gap strategy. It plans to open more than 100 new stores this year and expand special stores. These include 'THE stores' located in scenic spots like Jeju and Uiam Lake, and 'concept stores' in unique spaces such as traditional markets and old houses, currently operating 11 nationwide. Chairman Jung pledged, "We will make 'Korean Starbucks' with uniquely Korean themes create 'Starbucks of Korea.'"

Reorganizing Business Sectors Needing Improvement... Entering Normal Track through Organic Collaboration

Since his inauguration last year, Chairman Jung has also focused on reorganizing business sectors requiring improvement, such as e-commerce and construction. Representative examples include replacing the CEOs of Shinsegae Construction, SSG.com, and Gmarket, and enhancing logistics competitiveness through collaboration with CJ Group, known as the 'cousin alliance.' This year, the plan is to make it the 'first year of complete normalization' by establishing a foundation for these businesses to grow again.

First, SSG.com, which achieved its first annual EBITDA profit of 5 billion won last year, will accelerate profitability improvement and logistics competitiveness. It is rapidly expanding delivery coverage through the nationwide logistics infrastructure of about 700 facilities owned by CJ Logistics. After starting dawn delivery in the Chungcheong region in December last year, it expanded to Busan and Daegu from last month.

Gmarket is establishing a joint venture (JV) with Alibaba International to create synergy with a global platform. The corporate merger report for the JV establishment has been submitted to the Fair Trade Commission, and once the commission completes its review and court approval for in-kind contributions is obtained, the JV establishment will be finalized.

Establishing a JV with overseas companies and choosing strategic collaboration with logistics specialists is Shinsegae Group’s choice to survive in the rapidly changing e-commerce market. Chairman Jung emphasized, "To overcome difficult situations, it is necessary to overturn fixed ideas. Especially, active collaboration with external parties can be a catalyst to change market trends."

Following the delisting last month, Shinsegae Construction was incorporated as a subsidiary of Emart, and plans to establish an efficient decision-making system and swiftly implement mid- to long-term business portfolio strategies.

Additionally, convenience store Emart24 aims to continue improving operating losses in the third and fourth quarters of last year by promoting 'No Brand.' The number of Emart24 stores introducing No Brand products surpassed 1,000 early this year. By the end of this year, No Brand stores will expand to 2,500, and to 4,000 next year, selling No Brand products in more than 60% of all stores.

Shinsegae Group also plans to continue a performance-oriented, on-demand personnel policy this year. Chairman Jung said, "Personnel decisions based on merit and demerit are essential to enhance the group’s fundamental value of customer satisfaction and to step on the accelerator for growth. We will provide appropriate rewards to organizational members who achieve results through change and challenge and continue to encourage innovation."