Jung Yong-jin’s distribution + baseball concept… Did you aim for the next-generation baseball field that attracts attention in the US and EU?

Input 2021.01.26 14:18

E-Mart signed a memorandum of understanding for acquisition of SK Wyverns for KRW 135.2 billion
Economic effect of complex development of the baseball field and nearby commercial districts ↑
Pay attention to’stadium shopping’ for mobile orders at European passenger seats
“It could be bad news when it comes to negative news”… E-Mart stock price fell

Shinsegae Group E-Mart (139480)As the company decided to acquire SK Wyverns, a prestigious professional baseball club, it is attracting attention to what kind of synergies a large distribution company with sales of 15 trillion won will create with sports.

In the U.S., projects to increase spectators and revitalize the local economy by developing a baseball field with nearby commercial districts have been active since 3-4 years ago. In Europe, so-called’Stadium shopping’, which introduces mobile shopping to baseball stadiums, is emerging. There is also a possibility that E-Mart, which is constructing an international theme park in Hwaseong, Gyeonggi Province, will incorporate foreign cases into Korea.

According to the business community on the 26th, it is known that E-Mart’s acquisition of SK Wyverns strongly reflected the will of Vice Chairman Chung. He emphasized to executives and employees that “competitors between E-Mart and Shinsegae Department Store are baseball fields and theme parks” from the late 2000s and said that distribution stores should be places of experience and entertainment.

Among sports events, baseball has a great effect of promoting consumption. In Korea, you can watch baseball while eating and drinking, so snacks, chicken, and convenience store sales within a kilometer radius of the day of the game will increase by double digits than usual. Since fans are loyal to the baseball team, sales of club-related products are on the rise. An analysis suggests that it would have been an attractive sale for E-Mart, which needs to expand the customer base in their 20s and 40s.

Researcher Oh Rin-ah of Ebest Securities said, “We will be able to combine functions such as experiences and experiences of offline platforms with the existing distribution channels of Shinsegae Group.” “It’s increasing, so we can capture the generations that will drive future consumption in terms of marketing.”

The industry expects that E-Mart will naturally promote Starfield, a complex shopping mall of Shinsegae Group, by replacing the signboard with the name of the Munhak Stadium, which is currently named’Incheon SK Happy Dream Stadium’, to’Literature Starfield’. It is also possible to engage in sports marketing in connection with Starfield Cheongna, which is scheduled to open in Cheongna, Incheon in 2023.

It is also of interest that the vice chairman Jung, who is bright with overseas distribution trends, will incorporate the US and European cases into Korea. In the United States, a large-scale project to develop a baseball field that is several decades as short and nearly 100 years old with nearby commercial districts has been actively underway since 3-4 years ago. A prime example is’Truist Park’, the home stadium of the Atlanta Braves, an American professional baseball team that reopened in 2017.

Cobb County, Georgia, where the stadium is located, and Liberty Media Group, the owner of the club, invested 622 million dollars (700 billion won) to rebuild the stadium as a state-of-the-art facility and built a cultural complex called Battery Atlanta nearby. Various cultural facilities such as residential facilities, shopping complexes, restaurants, and outdoor swimming pools were located in this space. Spaces are connected so that customers who watch the game can naturally enjoy shopping and visit restaurants.

Cobb County had to cover the cost of a complex development project with large-scale bond issuances, but since 2018, operating revenues have increased and tax revenues have been increasing. The cost of the local government fund to operate the baseball field also decreased from $8 million in 2017 to $5.8 million in 2018. Famous ballparks such as Dodger Stadium in Los Angeles Dodgers, Bush Stadium in St. Louis Cardinals, and Great American Ball Park in Cincinnati Reds have also been redeveloped to open a large number of commercial facilities.

Although it has not yet been commercialized in Europe, a marketing strategy called’stadium shopping’ is drawing attention as a way to combine distribution and sports.

“Stadium shopping will be promising in the future,” said Sander Van Steifout, director of the home stadium of Dutch football team AFC Ajax, in an interview with a magazine published by Huawei, a Chinese telecommunications company. “If a system that allows stores to receive orders and prepare them for customers to pick up can be commercialized, and a system that can receive club T-shirts with their names on the same day, it will lead to increased sales.”

However, the acquisition of baseball teams by large corporations is not always a positive factor in management. This is because if fans’ hot interest in professional baseball teams is combined with negative issues such as poor performance, players’ drugs, illegal gambling, etc., it can spread to boycotts against the parent company. After the news of the acquisition of SK Wyverns was announced, E-Mart’s share price has fallen by more than 4% during the day. Amid the sluggish distribution industry, concerns over large-scale cash expenditures in areas that don’t seem to have much to do with the main business immediately acted as a negative factor.