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Korea's Hyundai Department Store under Fire for Exaggerating Its Ties with Amazon
Misleading PR Campaign
Korea's Hyundai Department Store under Fire for Exaggerating Its Ties with Amazon
  • By Choi Moon-hee
  • September 22, 2018, 14:55
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A view of the Hyundai Premium Outlet Gimpo branch opened on August 24 after renovation

Hyundai Department Store, a major retail group in Korea, has come under criticism by exaggerating its ties with an affiliate of U.S. online retail giant Amazon.

The department store is planning to open a branch in Yeouido, central Seoul, in the second half of 2020 as a futuristic retail store. Regarding this, the retailer signed a strategic cooperation agreement (SCA) for the establishment of a futuristic retail store with Amazon Web Services (AWS) at the office of Amazon Web Services Korea on August 20.

AWS is a subsidiary of Amazon.com that provides on-demand cloud computing platforms to individuals, companies and governments, on a paid subscription basis.

However, in its press release, Hyundai Department Store said as if it had joined hands with Amazon.com.

The first sentence of the press release reads, "For the first time as a Korean distributor, Hyundai Department Store collaborates with Amazon, the largest online retailer in the world, to establish a futuristic retail store,” emphasizing the department store’s cooperation with Amazon.

The press release does say in the middle that the group has signed a contract with Amazon Web Services, but by emphasizing “Amazon” at the beginning, it led many Korean media outlets to play up the contract signing, using such misleading titles as “Amazon Finally in Korea,” “Hyundai Department Store Holding Hands with Amazon,” and “Korean Version of Amazon about to Open in Yeouido.”

According to Yonhap News, Amazon filed a complaint that its headquarters were not entering Korea and asked Hyundai Department Store to use the name of its subsidiary.

Yonhap News quoted a Hyundai Department Store official as saying, "The press release states that the agreement was concluded with Amazon Web Services, and the entire content of the press release was finalized after consultation with Amazon Web Services."

A Hyundai Department Store official denied the Yonhap report that Amazon filed a complaint regarding the department store’s misleading press release.

“Amazon has not made any complaints to us," a Hyundai Department Store official said in a call with Business Korea. “The press release did not exaggerate. It was some journalists who exaggerated.”

According to Internet media outlet Insight, Hyundai Department Store Group chairman Chung Ji-sun recently told executives at a recent management strategy meeting to “further develop the strategic partnership with Amazon.” He reportedly said, “By studying the innovation case of Amazon, the leader of the global online distribution industry, we need to provide distinguished services and shopping experiences for Hyundai Department Store customers.”

Chairman Chung’s remark itself sounds like the group is collaborating with Amazon.

Amazon.com is one of the largest online distributors in the world and is leading the advanced distribution technology. So, Korea has been paying attention to when and how the retail powerhouse would enter the Korean market.