S.Korea's Shinsegae, KT tie up to develop digital ecosystem

South Korea’s retail giant Shinsegae Group and leading telecommunication carrier KT Corp. have joined hands to develop the digital ecosystem in various sectors such as urban air mobility (UAM) and logistics.

Shinsegae and KT said on Wednesday they agreed to cooperate on the upgrade and operation of logistics, property development, digitalization of offline stores, expansion of digital advertising and marketing, as well as membership.

They aim to expand the integrated digital ecosystem by applying advanced technologies to online and offline platforms, as well as their customers’ data.

“The cooperation between Shinsegae Group and KT is a companion to establish the most future-oriented digital ecosystem that eliminates the boundary of online and offline,” said Kang Heui Seok, CEO of E-Mart Inc., the group’s hypermarket chain unit, in a statement.

Shinsegae has been working on digital transformation since group vice chairman Jeong Yong-jin emphasized the preparation for digital-based future businesses earlier this year.

KT, which has been seeking measures to diversify profit sources and reduce the reliance on the traditional telco sector, in June unveiled a plan to invest nearly $10 billion in its digital platform sector by 2026 as it aims to the industry for future growth.

UAM, LOGISTICS

Shinsegae is expected to apply KT’s advanced technologies to major property development projects.

The group may utilize technologies of UAM, self-driving systems, robots and other areas where KT has developed projects. The retail behemoth is also likely to implement the carrier’s infrastructure technologies in major shopping complexes, which require stable communication networks.

In the near term, both are predicted to join forces on the digitalization of offline stores of E-Mart, the country’s largest hypermarket chain. They may upgrade self-checkout counters at those supermarkets, while optimizing store layouts with KT’s artificial intelligence technologies, for example.

KT and Shinsegae sought cooperation to combine their logistics capabilities to upgrade the sector.

The group operates an extensive logistics network across the country including offline stores, large logistics centers and storage for agricultural and marine products. KT aims to optimize deliveries based on AI and data while setting up a smart logistics center through Lolab, its digital logistics subsidiary.

Shinsegae and KT are likely to expand delivery areas and shorten shipping times if they jointly utilize and upgrade the group’s logistics infrastructure.

The group plans to significantly improve its fulfillment service and last-mile delivery business with KT’s digital platform technologies.

Write to Dong-Hui Park at donghuip@hankyung.com
Jongwoo Cheon edited this article.