[Exclusive] Vice Chairman Jeong Yong-jin's First US Business Trip in the COVID Era... "Accelerating Market Penetration"

Departed for LA Early This Month, Conducting Local Business Inspection for Two Weeks
Discussed 'Untact' Business with New CEO of US Corporation
Devising 'Post-Corona' Strategy ... Preparing for Coupang IPO Threat

[Asia Economy Reporter Jo In-kyung] Chung Yong-jin, Vice Chairman of Shinsegae Group, has embarked on a business trip to the United States after postponing it for a year. With Coupang's upcoming listing on the New York Stock Exchange emerging as the biggest threat in the distribution industry, and the pressing issues such as expanding local retail stores of Emart's U.S. subsidiary, it seems difficult to delay any longer.

Checking the Status of Local U.S. Business

According to Shinsegae on the 15th, Vice Chairman Chung departed for Los Angeles, U.S., earlier this month and has been staying there for nearly two weeks to review local business operations. A senior group official stated, "Since Emart operates several businesses locally in the U.S., Vice Chairman Chung went personally to inspect and thoroughly review the overall business status," and confirmed, "He has not returned yet."

This is the first business trip for Vice Chairman Chung in a year since he visited New York in January last year to attend the world's largest retail exhibition, ‘NRF 2020’. The COVID-19 pandemic significantly restricted international travel, and it was also urgent to manage the domestic business, which saw a sharp decline in performance due to sluggish domestic demand and intensified online-offline competition.

During this U.S. visit, Vice Chairman Chung is known to have engaged in in-depth discussions with Neil Stern, CEO of the local subsidiary Good Food Holdings, regarding ‘untact business’ (contactless business). They are expected to discuss not only existing businesses such as grocery sales and restaurant operations but also ways to apply Korean-style distribution services already experienced domestically?such as strengthening fresh food and online sales and establishing home delivery systems?to the U.S. market.

Coupang’s trajectory, with its planned listing on the New York Stock Exchange, is also one of Vice Chairman Chung’s concerns. Plans to seek countermeasures against Coupang, which is expanding its domain from distribution to platform business based on massive financial resources, are also underway.

Full-Scale Post-COVID Strategy

In 2018, Emart acquired the local distribution company Good Food Holdings for 307.5 billion KRW through PK Retail Holdings, and the following year purchased the local grocery store New Seasons Market for 323.6 billion KRW. Despite the impact of the COVID-19 pandemic, the 51 stores operated by these distribution companies continued stable growth. This was due to increased demand for premium ingredients that could be cooked at home, as restaurant operations were suspended and stay-at-home orders were issued. Good Food Holdings’ sales from the first to third quarters last year reached 1.1967 trillion KRW, a 135.7% increase compared to the same period the previous year.

At the end of last year, Vice Chairman Chung appointed Neil Stern as the new CEO to oversee the business. This is interpreted as a move to expand the U.S. retail business. Stern, a former U.S. retail consulting firm professional, has extensive experience in the U.S. retail industry, including participation in major mergers and acquisitions (M&A) at Walmart International.

An Emart official said, "Vice Chairman Chung is considering business expansion under the judgment that the outlook for the U.S. business is not bad," adding, "We are looking for ways to quickly respond to changes in the U.S. retail market, which will be reorganized in the post-COVID era."

Vice Chairman Chung also plans to accelerate preparations for opening the first ‘PK Market,’ a premium grocerant (grocery + restaurant) to be located on the 1st to 3rd floors of a mixed-use commercial facility in downtown Los Angeles. The opening was originally scheduled for the second half of 2019 but was delayed due to external factors such as the spread of COVID-19.

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