Samsung reigns; Shinsegae rises meteorically
Top conglomerates’ list faces big changes since 2000
By Park Jae-hyuk
The legacy of the late Samsung Group founder Lee Byung-chul continues as the nation’s largest group and the two fastest-growing conglomerates have something to do with the legendary businessman.
According to CEO Score, Wednesday, Samsung Group has maintained the top spot in corporate rankings for 17 consecutive years since 2000. Samsung took first place in 2016 again, with 363 trillion won ($323 billion) in assets.
The market consultancy compared the top 30 list in 2000 with the list last year to find the meteoric rise of Shinsegae Group, which soared from 24th to 11th with assets of 32 trillion won.
Shinsegae Chairwoman Lee Myung-hee is the youngest daughter of founder Lee.
CJ Group showed the second-fastest growth from 19th in 2000 to 15th last year, with 28 trillion won in assets. CJ Chairman Lee Jay-hyun is grandson of founder Lee.
Compared to Samsung family companies’ good performances, its archrival Hyundai faced mixed results. While Hyundai Motor Group ranked second and Hyundai Heavy Industries ranked ninth, Hyundai Group fell off the top 30 list last year.
Although Hyundai Group spun Hyundai Motor and Hyundai Oilbank off in 2000, it ranked second at that time. But it shrunk dramatically in recent years, after the group spun Hyundai Heavy Industries off and sold Hyundai Securities and Hyundai Merchant Marine.
Hyundai Department Store once fell from the ranking in 2005 and the 2007-2009 period, but it came in at 23rd last year.
LG Group placed fourth last year with 112 trillion won in assets, down from third in 2000. GS and LS groups, both of which were separated from LG, ranked seventh and 17th in 2016, respectively.
POSCO, formerly a state-owned enterprise, ranked sixth.
In contrast, some firms have faced misfortune over the past 17 years. Among the top 30 in 2000, 13 conglomerates have been disbanded or have fallen from the list.
Ssangyong Group was virtually disbanded, after it separated S-Oil and STX Heavy Industries. Bankrupt Tongyang Group experienced the same fate.
Kumho Asiana’s ranking plunged from ninth to 19th, after a managerial battle between the brothers of the owner family in 2010. Hanjin Group’s ranking dropped from sixth to 14th, after Hanjin Shipping went bankrupt last year.
“We would have to ask why Shinsegae and CJ have chalked up such impressive growth. Both are the country’s representative retail-focused groups so we can learn that the retail industry has expanded so much since the onset of the 21st century,” CEO Score President Park Ju-gun said.
“By contrast, brick-and-mortar companies either collapsed or lost steam. That’s why some groups fell on the top 30 list or simply disappeared. I wonder what would be the next big businesses over the next decades. Our chaebol would need to keep an eye on industrial trends.”
Korea’s conglomerates are sometimes called chaebol. It refers to Korea's sprawling conglomerates in which founding families exercise almost unchecked control despite small direct shareholdings.
Sometimes likened to keiretsu of Japan, the most outstanding examples are Samsung Group and Hyundai Motor Group.