Distribution Industry's 5 Companies, 5 Unique Crisis Escape Strategies... Leaders' New Year Message: "Innovate"

New Year's Address Common Keywords: 'Crisis, Innovation, Profitability'
"Address Customer Complaints" Emphasizing Customer-Friendly Actions
Digital Transformation Also in Focus

[Asia Economy Reporter Cha Min-young] As the heads of major domestic distribution industries who endured difficulties due to poor performance in 2019 announced their New Year's addresses for 2020, a common theme emerged: overcoming this year's 'crisis' through 'innovation.' Instead of pursuing reckless quantitative growth, the policy is to focus on profitability by strengthening internal capabilities.

Shin Dong-bin, Chairman of Lotte Group, set the goal of a 'sustainable future' and presented two central pillars: empathy (共感) and coexistence (共生). Chung Yong-jin, Vice Chairman of Shinsegae Group, who opened a new communication channel through social networking services (SNS), expressed his determination to resolve the crisis of department stores and marts through customer-centric management.

Son Kyung-sik, Chairman of CJ Group, declared a shift to a 'practical-centered' management paradigm by replacing the New Year's ceremony with an internal broadcast, clearly expressing his intention to shake off the burden of deteriorating financial structure. Chung Ji-sun, Chairman of Hyundai Department Store Group, emphasized the importance of 'innovative thinking' and stressed the will for swift execution. Cha Seok-yong, Vice Chairman of LG Household & Health Care, revealed his determination to firmly step forward as a global company this year, building on last year's entry into the Americas.

Shin Dong-bin, Chairman of Lotte: "Let's Create a Sustainable Future through Empathy and Coexistence"

Shin Dong-bin, Chairman of Lotte Group

On the 2nd, Shin Dong-bin, Chairman of Lotte Group, conveyed to employees in his New Year's address, "Let's create a sustainable future through empathy and coexistence."

Chairman Shin urged, "Please strive to provide better value through continuous empathy with customers," and emphasized, "We must continuously communicate with customers to quickly understand their needs and, furthermore, what the times pursue, so that we can present creative and new values." He added, "Please make efforts to provide customers with values that are one step faster than other companies and one span better than yesterday."

He ordered to establish a foundation for sustainable growth through efficient innovation of the business structure. Chairman Shin said, "In the whirlpool of change, core competencies that firmly support the company are essential," and "We must develop businesses that can effectively demonstrate our strengths."

He continued, "There is no need to be bound by existing business fields," and stressed, "Based on our capabilities, we must proactively innovate and become game changers leading the market." He also once again urged business innovation through digital transformation, which he has emphasized so far.

He also emphasized creating a flexible and open corporate culture. Chairman Shin said, "To respond swiftly to change, we must abandon rigid corporate culture and habitual work practices," and "Open innovation to seek new growth engines will start from our own changes."

Finally, Chairman Shin urged, "Let's become a 'good company' that pursues coexistence with our society." He said, "Please find sustainable ways to contribute to society that allow growth together with all stakeholders and social communities, including customers, employees, partners, and local communities," and added, "There must be a belief that what Lotte does creates new value and positively influences our society."

Chairman Shin concluded his New Year's address by saying, "We live in an era where it is difficult to predict even five years ahead, so we must constantly change through continuous self-reflection," and "If we are together, Lotte can continue to grow sustainably and become a trusted and good company in the future."

Reporter Lee Seung-jin promotion2@asiae.co.kr

Chung Yong-jin, Vice Chairman of Shinsegae Group: "Department Stores and Marts, Ultimately the Answer Lies with the Customer"

Chung Yong-jin, Vice Chairman of Shinsegae Group

"Ultimately, the answer must be found in customer complaints."

Chung Yong-jin, Vice Chairman of Shinsegae Group, emphasized the 'importance of customers' in his 2020 New Year's address announced on the 2nd.

Vice Chairman Chung stressed, "A recession means fewer opportunities, not that opportunities disappear entirely," and emphasized that prepared companies can achieve greater growth during a recession.

To this end, he asked to focus on three capabilities this year: a profitable business structure, fanatical focus on customers, and discovering new businesses for future growth.

He particularly emphasized that to respond to the rapidly changing distribution environment, the center must be held by the voice of the customer. He added that 2020 should be a year when the customer's voice is louder and clearer.

Vice Chairman Chung said that all answers are contained in Shinsegae Group's management philosophy, emphasizing that the group's reason for existence is to find and improve what is unsatisfied or unsatisfactory from the customer's perspective and to innovate.

From this perspective, he ordered all employees to reflect on the meaning of the management philosophy in 2020 and to discover new growth opportunities from customer complaints. He emphasized the need to break away from past customs to achieve this.

Vice Chairman Chung quoted Malcolm Gladwell's phrase, "To a bug living inside a bitter wasabi, the world is all wasabi," warning that falling into the sweetness of customs will only erode one's small world and eventually lead to decline.

This warns against losing the customer's voice by rigidifying flexibility and sensitivity of thought while pursuing only efficiency within the framework of long-term success. It means placing the customer at the center and continuously communicating with them to satisfy their desires.

To this end, he emphasized that instead of doing everything moderately well, each company must firmly secure the fundamental core competitiveness, the 'must-have' capabilities.

Shinsegae Department Store must be a 'customer lifestyle destination,' where each part inspires customers at a higher level. Emart must also secure capabilities as 'Korea's best grocery shopping guardian' through constant ultra-low prices, independent product development, and grocery store experiences.

Vice Chairman Chung emphasized, "In 2020, all Shinsegae Group businesses must devote everything to essential must-have capabilities to find opportunities from customer complaints," and urged, "We must analyze meticulously and prepare thoroughly to turn crises into opportunities."

Reporter Cha Min-young blooming@asiae.co.kr

Son Kyung-sik, Chairman of CJ Group: "Let's Shift the Management Paradigm to Innovation Growth with Profitability"

Kyungho Son, Chairman of CJ Group

CJ Group declared its determination to make 2020 a 'year of management paradigm shift to innovation growth' to actively prepare for the possibility of a prolonged recession due to domestic and global economic uncertainties.

In his New Year's address delivered via internal broadcast on the 2nd, Son Kyung-sik, Chairman of CJ Group, emphasized, "In the current crisis where domestic and global economic downturns continue, we should prioritize 'innovation growth' accompanied by stable profitability over 'quantitative growth.'"

Chairman Son urged employees to make this year a year to secure profitability at the level of global top-tier companies, improve financial structure, and secure global competitiveness in core businesses and major product categories.

Instead of the usual New Year's ceremony, CJ Group simultaneously broadcast Chairman Son's New Year's address to employees worldwide through internal broadcasting. Delivering the New Year's address in a more efficient and simplified manner this year symbolically heralded the shift to a practical-centered management paradigm.

Chairman Son said, "The shift to innovation growth is a preparation process for full-scale global growth in the future," and emphasized, "During this period, let's focus on strengthening R&D related to core businesses, developing new technologies, and securing talent to enhance challenging super-gap capabilities."

This year, CJ Group plans to ▲enhance corporate value based on innovation growth, ▲secure and continuously strengthen super-gap capabilities that will be the driving force for a new leap, and ▲firmly establish CJ's top-tier culture centered on 'top talent,' 'responsible management,' and 'goal achievement.'

Chairman Son encouraged employees, "There will be painful and difficult moments in the process of improving our constitution, but let's keep evolving and challenging while looking to the future and steadily moving forward," and added, "Let's continue CJ Group's persistent history of challenges from evolving in raw material businesses such as sugar and flour to Dasida, Hetbahn, entertainment, and logistics businesses even amid the current crisis."

Reporter Lee Seon-ae lsa@asiae.co.kr

Chung Ji-sun, Chairman of Hyundai Department Store Group: "2020 as the Starting Point of a New Decade and a Turning Point for Growth"

Jung Ji-sun, Chairman of Hyundai Department Store Group

Chung Ji-sun, Chairman of Hyundai Department Store Group, emphasized innovation at the group's joint New Year's ceremony held on the 2nd, saying, "We must resolve the urgent determination that if we do not change, we will inevitably sink."

In his New Year's address, Chairman Chung stated, "Let's make 2020 the starting point of a new decade for the group and a turning point to practice substantial changes for growth, and create a vision that can instill confidence in growth."

He added, "We must resolve the urgent determination that if we do not ride the wave of change, we will inevitably sink," and emphasized, "When we boldly face failures through numerous challenges, visions become reality, and our group can write a new history."

Chairman Chung presented three major management policies: ▲pursuing growth strategies based on innovative thinking and execution, ▲changing business models focused on customer value, and ▲building an organizational culture of empathy and cooperation.

He said, "In a situation where emergencies have become routine, it is important to establish growth strategies through 'innovative thinking' that understands the flow of change and finds alternatives," and "We must quickly read the flow of change and supplement and execute existing strategies."

He noted, "It is impossible to perfectly predict market and customer changes, establish perfect plans, and execute at the optimal timing," and emphasized, "A method of making agile judgments, executing quickly, and supplementing plans is necessary."

Regarding business model changes, Chairman Chung said, "We must redesign existing business methods to match changing customer values," and "We must not just stay at doing better but act differently to find ways to provide new value to customers." He also stressed promoting digital transformation strategies tailored to each company's business characteristics.

He also emphasized building an organizational culture of empathy and cooperation. Chairman Chung said, "Rapid changes ahead can only be responded to by consolidating organizational capabilities based on smooth cooperation systems," and urged, "Let's make a culture of cooperation, where people with different perspectives and experiences raise issues and find solutions together based on shared goals, a core culture of our group."

Reporter Lee Seung-jin promotion2@asiae.co.kr

Cha Seok-yong, Vice Chairman of LG Household & Health Care: "Leap Beyond Asia to Global"

Cha Seok-yong, Vice Chairman of LG Household & Health Care

Cha Seok-yong, Vice Chairman of LG Household & Health Care, emphasized in his New Year's address on the 2nd, "Let's advance our business structure and make every effort to secure global competitiveness to leap beyond Asia and become a global company."

Vice Chairman Cha said, "Despite the challenging domestic and international business environment last year, we achieved meaningful growth by setting record-high performances in all business divisions including cosmetics, household goods, and beverages, and successfully acquired the 130-year-old Avon business, securing a foothold for entry into the Americas market."

He presented key initiatives for this year: stepping up as a true global company, securing the highest global competitiveness across the entire value chain, and building a just and dynamic corporate culture.

Vice Chairman Cha emphasized, "To become a true global company, we must maintain the existing global business development momentum while accelerating the successful settlement of the Americas business."

He added, "We must strengthen competitiveness in the cosmetics business to nurture world-class luxury brands, foster an integrated premium brand of household goods with differentiated concepts, strengthen beverage brand market dominance and establish an efficient supply system, and promote digital transformation to enhance global expansion and future business capabilities."

He also said, "Let's build a just and dynamic company," and emphasized, "At this important moment of leaping into a true global company, we will build a just corporate culture based on trust, and firmly establish a culture of boldly challenging new things and continuously pursuing profound innovation with the mindset of 'Mulgyeongsosa (勿輕小事),' meaning not to treat small matters lightly."

Vice Chairman Cha referred to a line from the drama 'When the Camellia Blooms' that he recently found impressive: "Can a person become a miracle to another person?" He said, "PD Cha Young-hoon, who directed this drama, described the theme as 'a story where the goodwill of ordinary and small people gathers to create miracles in our society.'"

He concluded, "The miraculous history that LG Household & Health Care is writing is a miracle made by the small differences that our LG Household & Health Care family members build day by day for the company," and said, "Can a person become a miracle? Yes, we are all the protagonists of miracles," ending his New Year's address.

Reporter Jo Yoo-jin tint@asiae.co.kr

This content was produced with the assistance of AI translation services.