Bain, BCG proxy war breaks out in retail industry

E-mart CEO Kang Heui-seok, left, and Lotte Mart CEO Kang Sung-hyun / Courtesy of each company

By Park Jae-hyuk

Bain & Company and Boston Consulting Group (BCG), long-running rivals in the global management consulting industry, have unintentionally begun to compete with each other in Korea's retail industry, following the latest reshuffles in Shinsegae and Lotte.

Lotte said last month it appointed Lotte Nestle Korea CEO Kang Sung-hyun as the head of its discount chain unit, Lotte Mart. He previously worked as a BCG consultant dealing with the retail industry and consumer products, before joining the conglomerate in 2009.

Industry officials said his appointment indicates Lotte's intention to defeat its rival Shinsegae, which enjoyed a turnaround in its discount chain's earnings after hiring former Bain Partner Kang Heui-seok as E-mart CEO a year ago.

Despite the COVID-19 pandemic, E-mart posted 5.9 trillion won ($5.4 billion) in sales during the third quarter, up 16.7 percent from a year earlier. Its operating profit rose 30.1 percent to 151.2 billion won.

Due to its success, the E-mart CEO also started to lead Shinsegae's e-commerce subsidiary SSG.com in October.

He recently gave the position of the SSG.com chief strategic officer to his previous colleague, former Bain consultant Choi Young-joon, who served as the chief financial officer at TMON. Choi is known as the one who enabled TMON to have its first monthly surplus and pursue an initial public offering.

Lotte also hired another former BCG consultant, Jung Kyung-woon, in October as head of the Lotte Shopping headquarters planning and strategy division, which supervises Lotte's five retail units ― department store, discount chain, supermarket, e-commerce and drugstore.

Before joining the conglomerate, he worked for domestic pharmaceutical firm Dong-A ST and helped the company increase profits.

Industry insiders are paying keen attention to the performances of Shinsegae and Lotte next year because their earnings can be regarded as indicators of the two consultants' abilities.