W Concept Also Steps Up... SSG.com Goes All Out to Expand Its Size

Subsidiary W Concept, SSG.com Coupon Giveaway
Critical to Attract New Customers and Retain Existing Ones
"Must Eliminate Concerns Through FI Stake Sale and Performance Improvement"

Online fashion platform W Concept is attracting attention by launching a promotion offering SSG.com discount coupons. As SSG.com’s financial investors (FI) move to recover investment funds worth over 1 trillion won, Shinsegae Group appears to be putting all its efforts into improving performance, including replacing SSG.com’s management team.

According to the distribution industry on the 21st, W Concept is running an event until the end of this month that provides all customers with SSG.com grocery shopping and free shipping coupons. W Concept is an online fashion platform selling domestic designer brand clothing and is a 100% subsidiary of SSG.com.

W Concept recently offered a 4,000 won discount coupon for the shopping cart to customers who have no purchase history on SSG.com in the past month or who are using the grocery shopping service for the first time. The coupon can be used when purchasing products priced at 9,900 won or more. Customers who have not used the grocery shopping service in the past year are given free shipping coupons.

This is the first time W Concept has held an event allowing all customers to receive benefits when purchasing products from SSG.com. Last year, W Concept provided SSG.com promotion coupons to specific customers, but it was not a promotion targeting all customers. Currently, the business areas W Concept is conducting with SSG.com include product linkage services and joint live broadcasts. A W Concept representative said, "The customer base using W Concept is mostly in their 20s and 30s, while SSG.com is used more by slightly older age groups," adding, "We held this event to expand SSG.com’s customer base by providing a shopping experience."

SSG.com also conducted marketing offering a one-year free membership to some premium customers who have not joined the membership program Shinsegae Universe Club. This included premium users who were enjoying the extension benefits of SSG.com’s existing VIP membership tier. Customers using the membership can enjoy coupon benefits worth about 110,000 won per month provided by Universe Club for one year.

This is interpreted as a strategy to prevent existing customers from leaving. Since consumers consider coupons and discounts when choosing e-commerce platforms, increasing benefits can be expected to have a lock-in effect. The Shinsegae Universe Club is a membership program involving six Shinsegae Group affiliates (SSG.com, E-Mart, Gmarket, Duty-Free Shops, Department Stores, and Starbucks).

Improving performance is the top priority for SSG.com this year. Earlier this month, Shinsegae Group signed a contract to sell 1,316,429 common shares (30%) of SSG.com held by financial investors (FI), the Hong Kong-based private equity firms Affinity Equity Partners and BRV Capital Management, to a third party by December 31.

This follows the FIs’ announcement to exercise put options (the right to sell shares at a specific price) this year, which were agreed upon when they invested 1 trillion won and acquired a 30% stake in SSG.com in two rounds in 2019 and 2022. The put option conditions were that if SSG.com’s total transaction volume (GMV) did not reach a certain level or if listing conditions were not met. As SSG.com’s initial public offering (IPO) was delayed, Shinsegae had conflicts with the FIs and agreed to sell the shares held by the FIs by the end of the year. According to the investment banking (IB) industry, Shinsegae Group is negotiating with domestic securities firms for the acquisition of SSG.com’s shares.

For this share sale, SSG.com must prove its corporate value through performance improvement. According to Statistics Korea, online shopping mall transaction volume increased by 10.7% in the first quarter. However, during this period, SSG.com’s sales decreased by 2% to 413.4 billion won. SSG.com has been recording losses in the 100 billion won range since 2021. Competition has intensified as domestic e-commerce platforms such as Coupang and Naver expand their market share, and the so-called 'Altesh' (AliExpress, Temu, Shein) C-commerce has strengthened its offensive in the domestic market.

For this reason, Shinsegae Group has taken the card of replacing SSG.com’s head with Executive Director Choi Hoon-hak to make a comeback in the e-commerce market. The new CEO Choi Hoon-hak recently served as head of SSG.com’s sales division. He was considered the right person to strengthen grocery (food) and logistics competitiveness. A distribution industry insider said, "It is important for SSG.com to expand its business scale through volume growth," adding, "However, the current e-commerce industry structure is such that investing 100 won does not even recover 100 won, so it is questionable who will actively invest." A securities industry insider said, "It is attractive as a Shinsegae Group asset, but the prevailing atmosphere is that the e-commerce business has declined."

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