Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Shinsegae’s heir apparent promoted to chairman, tightens grip on group
Shinsegae Group Chairman Chung Yong-jin / Courtesy of Shinsegae Group
By Lee Min-hyung
Shinsegae Group's heir apparent and former vice chairman Chung Yong-jin was promoted to chairman on Friday. The company said the retailer requires strong leadership to tackle the escalating market rivalry posed by emerging e-commerce giants here and abroad.
Many see the promotion as the group's move to reinforce its internal consolidation in the face of ever-growing threats by retail competitors. The group is also in dire need of strengthening its core competitiveness for cash-cow businesses after E-Mart, the nation's largest discount chain operated by Shinsegae, reported a shocking operating loss last year for the first time since 2011.
"Chung has been promoted to the top-ranking executive in hopes for him to exude strong leadership to break through the unfavorable management situation," an official from the group said. "The retail market is faced with much more diverse risk factors, as competition is getting fierce day by day. The latest promotion will help us strengthen our group-wide capability to remain more agile in the rapidly changing market environment."
Shinsegae Group is Korea's long-standing retail powerhouse along with Lotte Group, but the rapid rise of e-commerce players such as Coupang and AliExpress is challenging its conventional business model.
In response to these growing threats, Chung ordered his staff to change its business practices drastically.
"We should adopt a wholly-new approach and innovate ourselves," he told executives during a meeting in November. "We should transform everything from the organizational structure, internal system and even to the way of working."
Chung is faced with resolving crucial tasks of finding the group's next growth engines when traditional retailers' presence is declining after the COVID-19 pandemic reshaped consumers' shopping patterns.
He will focus on enhancing E-Mart's competitiveness in the market and looking for the next cash cow business.
Industry officials said the promotion of Chung, 56, was widely expected due to the mounting tasks ahead.
"Most conglomerates have in recent years pushed for the generational shift in top management, as was shown by Samsung, LG and Hyundai — all of their leaders are in their 40s and 50s," an official from a local conglomerate said. "Shinsegae appears to have reached an internal consensus over the dire need for strong leadership, as the group's archrivals, such as Lotte Group, are also heightening vigilance over the toughening market rivalry."
Chung joined Shinsegae Group in 1995, when he was 27, and was promoted to vice president at its strategy planning division two years later. He started taking de facto control of the group as vice chairman in 2006.