Chung Yong-jin, now chairman, to bring Shinsegae back from doldrums

Chung Yong-jin, vice chairman of South Korea’s retail giant Shinsegae Group, has been promoted to chairman to strengthen his clout over the conglomerate as the company faces growing competition from online platforms.

Chung, 56, leader of the country’s largest retailer and grandson of late Samsung Group founder Lee Byung-chul, on Friday assumed Shinsegae’s top post, Shinsegae Inc. said.

He has led Shinsegae as vice chairman for 18 years after joining the company as a strategy planning team director in 1995.

“Competition in the distribution market is intensifying. We need strong leadership and today’s promotion reflects our determination to make a quantum leap under his leadership,” the company said.

The group’s current leader, Chairwoman Lee Myung-hee, Chung’s mother, will support the new leader as the groupwide chair.

UPHILL BATTLE VS COUPANG

While retail companies struggled due to the COVID-19 pandemic, e-commerce platforms such as Coupang have grown rapidly, posing a threat to Shinsegae and other domestic retail giants.

E-Mart Inc., a unit of Shinsegae and Korea’s top hypermarket chain, last year posted its first annual operating loss on a consolidated basis, although it posted record sales of 29.4 trillion won ($22.2 billion).

On a standalone basis, E-Mart posted 188 billion won in 2023 operating profit, down 27.3% from the previous year.

Coupang, in contrast, posted its first-ever operating profit last year thanks to growing demand for online shopping and deliveries. Its revenue reached 31.8 trillion won, beating that of E-Mart.

The combined sales revenue of E-Mart and Shinsegae Department Store, run by Shinsegae Inc., reached 35.8 trillion won in 2023.

Shinsegae Department Store’s flagship store in Gangnam, an upscale district in southern Seoul, posted 3 trillion won in sales last year – a record high for a single branch.

CHUNG CALLS FOR DRASTIC REFORM

As the Shinsegae Group struggled, Chung called for groupwide drastic reform.

As part of this push, he carried out one of the group’s most drastic executive reshuffles last September, replacing chief executives of its two business pillars – E-Mart and Shinsegae Department Store.

The personnel changes came as Shinsegae, the country’s 10th-largest conglomerate, was reeling from falling sales and weak share prices amid the economic slowdown.

As a third-generation entrepreneur of Samsung Group, Chung is a cousin of Samsung Electronics Co. Chairman Jay Y. Lee.

After graduating from the prestigious Kyungbock High School in Seoul, he majored in economics at Brown University in the US while attending Seoul National University.

Chung has so far managed the retail, food and hotel businesses at Shinsegae, while his sister Chung Yoo-kyung, a Shinsegae Inc. president, has taken charge of the department store, duty-free and fashion businesses.

Chung Yong-jin and Chung Yoo-kyung have 18.56% of E-Mart, respectively. They also own 18.56% of Shinsegae Inc., respectively.

Their mother Lee has a 10% stake each in E-Mart and Shinsegae.

Write to Jae-Kwang Ahn at ahnjk@hankyung.com

In-Soo Nam edited this article.