CJ emerging as culture, food, logistics giant

A CJ Korea Express worker delivers express mail.

Lee Jae-hyun CJ Group Chairman

By Park Si-soo

On a Saturday afternoon in Shanghai, college student Wang Shu is watching the Korean film “Masquerade” at home. Feeling tempted to buy a shirt shown in the movie, he hooks up to an Internet shopping mall and places an order for an identical one. An online invoice informs him that local logistics firm CJ Korea Express will handle the shirt’s delivery.

Wang leaves home to meet his girlfriend at nearby multiplex cinema CGV. On the way, he hums along to songs of six-member boy band TIMEZ. Meeting his girlfriend, he guides her to the Korean restaurant “Bibigo” in the cinema and has her try his favorite Korean dish “Bibimbap” (rice mixed with assorted vegetables).They wrap up their dinner with a cup of brewed coffee and a piece of small chocolate cake at franchise cafe Tous les Jours and walk into a theater to watch the latest Korea-Chinese romantic comedy, Wedding Invitation.”

A sample of Korea’s signature dish “bibimbap” available at CJ’s Bibigo restaurant.

Wang is a fictional person and so is the entire account. But all the things he watches, listens, visits and eats in the story are actual products and services offered by Korea’s CJ Group. The conglomerate, headed by its Chairman Lee Jae-hyun, is pushing hard to have them available all over China and elsewhere in the near future.

“We should propel ourselves as a leading company selling Korean culture worldwide,” Lee said in May last year, when unveiling the firm’s new corporate slogan: “CJ makes culture.”

“We should try hard to make people around the world live happily with our products,” the chairman said. “The financial returns could be lower than expected. Nevertheless we should hold onto our duty of promoting our food, movies, TV programs, music and logistics and shopping services worldwide.”

CJ posted 26.8 trillion won in sales ($24.18 billion) last year on the back of good performances of its four core business segments: food and restaurant services; bioengineering; logistics; and media and entertainment. It is targeting 33 trillion won this year and aims to lift that to 100 trillion won by 2020, with nearly 70 percent generated from overseas markets.

Audiences watch a movie at CJ’s multiplex cinema chain CGV.

Movies, music & TV

Early this month, the Korean-Chinese joint production “A Wedding Invitation” took the Chinese market by storm. The Mandarin-language film reached the top in the Chinese box office less than one week after it was released there and raked in more than 100 million yuan (approximately 18 billion won) in sales during the period.

First released exclusively in China, the film was produced by the group’s entertainment business arm CJ E&M and distributed by China’s state-run distributor China Film Group.

E&M has extensive experience in the production of films, TV programs and music albums. Its repeated success in the domestic market over the past two decades has earned the company the nickname “Midas” in the country’s entertainment industry.

CJ said the comedy’s popularity in China indicates the firm’s success story could continue beyond its home country’s borders.

“The latest hit in China indicates that CJ’s movie is competitive enough in the global market,” a CJ spokesman said. “So far we have exported movies whose marketability was proven through rigorous test in the domestic market. But the latest news indicates that we don’t have to rely on that recipe.”

An aspiring singer performs during CJ E&M’s talent show Superstar K. CJ Group is seeking balanced growth of its four core business segments: food and restaurant services; bioengineering; logistics; and media and entertainment. / Courtesy of CJ

The company is also stepping up its efforts to export movie theaters. In 2009, CJ commercially introduced 4D film screening technology to its multiplex cinema chain CGV for the first time in the world. The high-end technology, named 4DX, enables a movie presentation to be augmented with environmental effects such as motion, odor and humidity, outside the standard video and audio. The technology was employed in theaters in eight countries, including China, Russia, Brazil, and Israel, with more theaters being prepared in Malaysia, Poland, Taiwan and the Czech Republic.

Last year, CNN Travel named the 4DX-based theater in Gangbyeon, Seoul, as one of the world’s best movie theaters.

An E&M official said the firm is also making a greater effort to produce music albums and TV programs that can draw attention from foreign viewers. The six-member boy band TIMEZ is the latest product targeting China, said the official, adding its popularity there is on the rise.

Food & restaurants

CJ views its food and restaurant business as the next growth engine.

Though revenue from the segment is lower-than-expected, the firm continues to increase investment in the business in line with the firm’s ambitious project of globalizing signature Korean dishes. All food products and restaurants are available overseas under the brand “Bibigo.”

Last September, the group’s food and restaurant business arm CJ Foodville formed a partnership with China’s real-estate developer SOHO China to facilitate its food business in the world’s most populous country. Under the partnership, CJ is given top priority in space in buildings and shopping malls owned by the Chinese developer.

Foodville owns several leading restaurant brands such as VIP’s family restaurant, Tous les Jours bakery, Twosome Place cafe, and Korean food restaurant Bibigo.

SOHO China, co-owned by its founder Pan Shiy and his wife Zhang Xin, has built or owns commercial buildings with a total gross floor area of more than 1.75 million square meters.

In line with the globalization strategy, Foodville opened the first “CJ Foodworld,” a complex of CJ’s four food brands VIPs, Tous les Jours, Twosome Place and Bibigo, in Lido, an affluent district in downtown Beijing, in September.

Then Foodville CEO Heo Min-heoi said China is a “key market” for the company.

“We will form partnerships with Chinese companies to increase the number of restaurants and stores selling Korean food,” Heo said. “Eventually we aim to have 10,000 stores worldwide by 2017.”

Tous les Jours made its debut in the United States in 2004 and China in 2005 and Vietnam in 2007. The bakery brand has posted double-digit growth in China and Vietnam, Foodville said in a statement.

Bibigo restaurant, specializing in Korea’s signature dish “bibimbap” has a presence in Beijing, Singapore, London, New York and Los Angeles.

Logistics

CJ is flexing its muscles to make headway toward its ambitious goal of breaking into the top five providers of global logistics services by 2020.

This is in line with CJ’s “Vision for 2020,” declared early last year, under which the combined annual sales of its logistics arms `and CJ GLS are forecast to reach 25 trillion won and operating profit of 1 trillion won expected by the target year.

Early this year, the group merged its two logistic affiliates to ensure more efficient operation.

“Our growth strategy focuses on balanced growth of the four core segments,” a CJ spokesman said. “So far the group has relied more on the food business, but this is no longer the case. The group will put more resources towards entertainment and bioengineering segments in order to get them, in the long run, to the same level as the food and logistics segments.”