Distribution Industry Hiring Season Begins, Focus on CEOs Leading the 'Endemic Era'

Early this month, regular executive appointments expected starting with Shinsegae, followed by Lotte and Hyundai Department Store groups
High inflation and exchange rates dampen consumer sentiment... Diagnosing another crisis after COVID-19
"Expecting leaders who can reverse the stagnant mood and actively respond to rapidly changing external environment"

Kang Hee-seok, CEO of Emart and SSG.com.

[Asia Economy Reporter Kim Yuri] The distribution industry is entering the executive personnel season, including appointments of chief executive officers (CEOs). As the industry transitions through a period toward a full return to normalcy after the endemic phase (periodic outbreaks of infectious diseases), the distribution sector, facing external crises such as high inflation and high exchange rates, is demanding crisis management capabilities different from those required during COVID-19 from the leaders who will guide the industry beyond next year.

According to the distribution industry on the 6th, starting as early as the beginning of this month with Shinsegae Group, regular executive appointments will follow next month with Lotte Group, Hyundai Department Store Group, and others. The timing of executive appointments in the distribution industry is gradually becoming earlier. This year, as consumer sentiment shrank due to soaring prices and high exchange rates, increasing uncertainty in the business environment, the industry is placing emphasis on quickly selecting individuals who can actively respond to the rapidly changing external environment and reverse the stagnation caused by COVID-19.

Shinsegae Group is expected to conduct regular executive appointments as early as the beginning of this month. Shinsegae Group, which announced personnel changes for the Emart division in October and the department store division in December, conducted integrated executive appointments in early October last year. The biggest point of interest is whether Kang Hee-seok, CEO of Emart and SSG.com, will be reappointed. Kang has been leading Emart’s online and offline businesses since 2020, when he became the first external hire to assume the CEO position in Emart’s history. He has led major investments such as the acquisition of Gmarket (formerly eBay Korea), the purchase of shares in SCK Company (formerly Starbucks Coffee Korea), and the acquisition of the SSG Landers (formerly SK Wyverns) baseball team. In the first half of this year, he launched the integrated paid membership 'Smile Club' combining SSG.com and Gmarket, and plans to expand loyal customers by establishing an integrated online-offline membership by the end of the year. However, improving profitability in discount stores remains a challenge. Emart recorded an operating loss of 12.3 billion KRW in the second quarter, turning to a deficit. The reappointment of Lim Young-rok, CEO of Shinsegae Property, Han Chae-yang, CEO of Chosun Hotel & Resort, and Kim Jang-wook, CEO of Emart24, is also drawing industry attention. The position of Song Ho-seop, CEO of SCK Company and head of Starbucks, which faced controversy this year due to carcinogens detected in some promotional items, is also a matter of interest. Song’s term runs until 2025.

Dongwoo Lee, Vice Chairman of Lotte Holdings.

Lotte Group conducted executive evaluations faster than usual ahead of next month’s appointments. Last November, Lotte pursued reform with a bold personnel reshuffle emphasizing external hires. The business unit (BU) system was reorganized into four industry groups (HQs): distribution, chemicals, food, and hotels. Kim Sang-hyun, a former P&G executive, was brought in as head of the distribution group, and Jung Joon-ho, formerly of Shinsegae, was appointed as the department store CEO. An Se-jin, a new business expert, was hired as the hotel group head. This year, it is expected that Lotte will again make appointments beyond pure bloodline considerations to respond to crises. Typically announcing regular executive appointments in December, Lotte made a surprise appointment in August 2020 amid the COVID-19 crisis, followed by regular appointments in November. This year, November appointments are anticipated. Executives at Lotte whose terms expire next year include Lee Dong-woo, Vice Chairman of Lotte Holdings; Kang Sung-hyun, CEO of Lotte Mart; Lee Gap, head of Hotel Lotte Duty-Free Business Division; Choi Kyung-ho, CEO of Korea Seven; Hwang Young-geun, CEO of Lotte Hi-Mart; Lee Young-gu, CEO of Lotte Confectionery; and Park Yoon-gi, CEO of Lotte Chilsung Beverage.

Hyundai Department Store Group is also expected to announce executive appointments next month. The reappointment of Lee Jae-sil, CEO of Hyundai Department Store Duty-Free; Kim Min-duk, CEO of Handsome; and Park Hong-jin, CEO of Hyundai Green Food, is being closely watched. The positions of department store heads Jang Ho-jin and Kim Hyung-jong are also under scrutiny following the fire accident at Hyundai Premium Outlet Daejeon branch.

An industry insider said, "Recently, there is a trend of actively appointing internal and external talents with expertise in various fields," adding, "While solidly maintaining existing businesses, the focus is on selecting talents who can smoothly take on new challenges amid rapidly changing internal and external environments."

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