Ssg.com Online-Offline Synergy... CEO Kang Hee-seok's Strategy Worked

Last Year Total Transaction Amount 3.9236 Trillion Won... 37% Sharp Increase
Strengthening 'PP Center' Linking Online and Offline... Effective Expansion of Delivery Capacity
"Will Enhance Assortment and Delivery Capacity through Open Market Changes and Additional PP Centers"
Searching for Additional Site for Metropolitan Area Coverage Logistics Center (NEO)
"Targeting 4.8 Trillion Won in Transactions This Year"

[Asia Economy Reporter Yuri Kim] Shinsegae Group’s integrated online mall SSG.com surpassed 1 trillion KRW in sales for the first time last year. It is evaluated that CEO Kang Hee-seok’s focus and concentration strategy, along with the online-offline synergy strategy, played a key role. By renewing major Emart stores to strengthen fresh food and popular restaurants, attracting younger consumers, and positioning these stores as 'our neighborhood’s small Starfield,' he also expanded the PP (Picking & Packing) centers linked to the stores to promote online synergy, which is proving effective.

SSG.com announced on the 19th that last year’s sales reached 1.2941 trillion KRW, a 53.3% increase compared to the previous year. In particular, the total transaction amount surged 37% to 3.9236 trillion KRW last year. Operating losses decreased to 46.9 billion KRW, about half of the 81.9 billion KRW loss in 2019. The strong sales growth in the fourth quarter of last year had a significant impact, with SSG.com posting sales of 338.5 billion KRW, a 45.1% increase compared to the same period the previous year. Operating losses also shrank to 10.4 billion KRW, about one-third of the 36.2 billion KRW loss in the same quarter of the previous year.

This performance improvement was influenced by a combination of factors, including a sharp increase in online fresh food consumption due to COVID-19 last year and SSG.com’s strengthened capacity to handle the volume accordingly. The 'Kang Hee-seok one-person system' for online and offline was a decision aimed at fast decision-making, integrated online-offline thinking, and maximizing synergy, and it is evaluated to be working effectively so far. In October 2019, Kang Hee-seok, a consulting expert and the first external CEO in Emart’s history, also took on the role of SSG.com CEO in October last year.

CEO Kang led the renewal of major Emart stores by prioritizing the strengthening of fresh and processed food businesses while boldly excluding underperforming non-food categories within stores. The vacant spaces were filled with well-known restaurants, kids’ facilities, and popular fashion and beauty brand stores as tenants (rental stores). Along with this, he expanded PP centers linked to the stores to enhance online responsiveness. PP centers operate by selecting, packing, and delivering products ordered through SSG.com directly from the stores, currently running in over 110 locations. PP centers handle 40% of SSG.com’s orders. An industry insider said, "Using existing stores nationwide as small logistics centers for regional delivery has the advantage of reducing delivery time and increasing the total volume that can be delivered."

SSG.com also strengthened its online-exclusive logistics center, NEO. Last year, it opened NEO003 in Gimpo, and with a total of three logistics centers in Yongin and Gimpo, SSG.com is scouting for additional sites mainly in the metropolitan area to secure more logistics centers.

This year, while expanding its size by broadening product assortment through the full-scale launch of the open market, SSG.com plans to simultaneously strengthen PP centers to maximize online-offline synergy. PP centers are expected to be introduced in most of the more than 10 Emart stores scheduled for renewal this year. An SSG.com official said, "The goal for this year’s transaction amount is to achieve more than 4.8 trillion KRW, a 22% increase compared to last year."

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