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Shinsegae buys baseball club; aims for retail-sports synergy

By Feb 24, 2021 (Gmt+09:00)

Shinsegae Group Vice-Chairman Chung Yong-jin.
Shinsegae Group Vice-Chairman Chung Yong-jin.


The vice-chairman of South Korea’s retail giant Shinsegae Group, Chung Yong-jin, has a reputation of being an early adopter. He's known to be sensitive to the latest trends given his position as a prominent businessperson at the forefront of the country’s retail industry.

Chung's acquaintances say that his leadership does not originate from counting numbers, but rather painting a bigger picture of the future. And Chung recently has become fixated with professional baseball, stepping up efforts in sports marketing activities via acquiring a baseball team and even recruiting the former major league All-Star outfielder Choo Shin-soo.

On Feb. 23, Shinsegae Group’s discount store chain E-Mart Inc. announced that it signed a formal contract to acquire a 100% stake in SK Group's baseball club, SK Wyverns, for 100 billion won ($90 million). The sale of the baseball practice field, land and buildings, valued at around 35.3 billion won in total, will be traded in a separate deal.

The group has finalized the registration for Korea Baseball Organization (KBO). The baseball team's new name and uniform design will be revealed soon.

On the same day, Shinsegae Group also announced the recruitment of Choo, the former Texas Rangers outfielder.

Choo is the highest-paid baseball player in Korean baseball history.
Choo is the highest-paid baseball player in Korean baseball history.


“Choo received good offers from major league teams, but he was eager to play for the KBO league and accepted our offer," said a Shinsegae official. Choo inked a 2.7 billion won ($2.4 million) contract, the largest pay in Korean baseball history. He plans to use 1 billion won for philanthropic causes.

CHUNG ENVISIONS SYNERGY BETWEEN RETAIL AND SPORTS

Chung recently went on a business trip to the US for a fortnight, during which he visited local Shinsegae affiliates and also spent a considerable amount of time studying professional baseball clubs' operation methods and measures to boost synergy between retail and sports.

The Shinsegae vice-chairman has short-term and long-term goals for the group's new baseball club. Chung's short-term goal is to maximize awareness for SSG.com, the online shopping mall under Shinsegae Group, by establishing an omnichannel where baseball enthusiasts can purchase various ballpark goods via SSG.com.

As for long-term objectives, Shinsegae plans to target the fandom market which has recently emerged as a promising retail channel amid the global pandemic. The approach is similar to the platform giant Naver Corp. joining forces with BTS label Big Hit Entertainment Co. to tie K-pop fandom with consumption.

Chung plans to establish a new baseball stadium in Incheon, the hometown of SK Wyverns. The new ballpark will serve as a massive marketing platform by offering automated stores that are powered by artificial intelligence and big data, akin to the e-commerce giant Amazon, which has been expanding its offline presence via grocery supermarket chain Whole Foods Market and Amazon Go, an automated convenience store chain.

As non-contact consumption becomes a general trend, automated stores are on the rise as viable alternatives in concentrated facilities, such as baseball stadiums, theaters and airports.

"As digital powerhouses break down barriers between industries and add pressure to traditional firms, Shinsegae's acquisition of a baseball team will be one of the various experiments carried out by an offline retail company," said a retail industry official.


Write to Dong-hui Park at donghuip@hankyung.com

Danbee Lee edited this article.

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