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The Korea Herald
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THE INVESTOR
March 28, 2024

Retail & Consumer

Shinsegae secures W1tr to expand online business

  • PUBLISHED :October 31, 2018 - 14:43
  • UPDATED :October 31, 2018 - 14:43
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[THE INVESTOR] Korean retail giant Shinsegae Group has secured funds worth 1 trillion won (US$877.42 million) from two global private equity firms to expand its presence in the e-commerce market here, according to industry sources on Oct. 31.

Affinity Equity Partners and Blue Run Ventures have reportedly signed a memorandum of understanding with the Korean retailing firm to fund its new e-commerce unit, which was originally planned to be launched before the year-end. They have wrapped up negotiations and signed a contract, with the two PEFs funding 500 billion won each.




According to sources, Shinsegae has also decided to spin off the online divisions of Shinsegae Department Store and discount chain E-mart and merge them to launch a single entity in the first quarter of 2019.

Most of the investments will be used to establish 14 more logistic centers, since the company only operates two currently, to strengthen and support its online platform. Through the expansion, Shinsegae’s online unit aims to reach 10 trillion won in online sales by 2023.

The Korean retail giant has been trying to expand its online presence since footfalls at its hypermarkets and department stores have been declining. As of now, it does not have a strong online presence, with sales reaching around 2.6 trillion won in 2017. This is lower than the top e-commerce operators like eBay Korea and 11st, which posted 14 trillion won and 9 trillion won, respectively, last year.

By Song Seung-hyun (ssh@heraldcorp.com)

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