Shinsegae Group announced on Oct. 31 that it has attracted 1 trillion won in investment from two foreign investment management companies, Affinity Equity Partners and BlueRun Ventures (BRV).
Shinsegae Group signed a memorandum of understanding with these investment management companies in January this year and concluded talks on specific investment conditions after nine months of discussion.
The group is planning to aggressively expand its online business by setting up a new corporation.
Of the 1 trillion won investment, it will receive 700 billion won when the planned new online company is launched, while the remaining 300 billion won will be invested later.
Shinsegae Group plans to set up the new corporation in the first quarter of next year. For this, it will spin off the online divisions of Shinsegae Corp. and E-Mart Inc. by the end of this year and merge them into a new entity.
To this end, the two companies will hold an extraordinary shareholders' meeting in December to approve the split plan.
Shinsegae Group plans to become the top e-commerce company in Korea through its new online corporation.
Shinsegae plans to invest a total of 1.7 trillion won in the online business to increase its online sales to 10 trillion won, five times the current level, by 2023.
To strengthen the competitiveness of its online business, the group will focus its investment on expanding logistics and delivery infrastructure.
The online logistics center currently under construction in Gimpo will start operating in the second half of next year.
In addition, the company plans to significantly expand online specialty products, including E-Mart strategic products and premium products from Shinsegae Department Store, and focus on developing IT skills related to e-commerce.
It is also planning to promote acquisition of companies if necessary.
"If Shinsegae Department Store and E-Mart have been responsible for the growth of Shinsegae Group so far, future growth will be led by the new online company," said Shinsegae vice chairman Chung Yong-jin. He said he would put the group’s core capabilities into the new company so that it can grow into the group’s core distribution channel that surpasses Shinsegae Department Store and E-Mart.