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| ▲ Shinsegae Group announced that it has signed a memorandum of understanding on the 26th through E-Mart to acquire a 100% stake in SK Wyverns owned by SK Telecom. The acquisition price is 135.2 billion won in total, and a new club is expected to be officially launched in March. The photo shows SK Wyverns cheering as the 2018 Korean series championship was confirmed. (Material photo) | |
| Ⓒ Yonhap News |
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“In the future, the competition in the retail industry will be a theme park or a baseball field.”
In 2016, Shinsegae Group Vice Chairman Jeong Yong-jin said, ahead of the opening of’Starfield’, the first shopping mall in Korea. At the same time, Vice Chairman Chung expressed his ambition to use the complex shopping mall business that combines contents such as leisure and entertainment with shopping, which is the main business, as the group’s new growth engine. As the consumer market has been reorganized from offline to online, it is believed that offline retailers will no longer be able to capture consumers’ footsteps with’shopping’ alone.
Four years later, Vice Chairman Chung no longer views theme parks or baseball fields as competitors. Rather, it has become a core business that must be directly embraced to establish a new distribution model that combines distribution and play. It has already started the construction of an international theme park in Hwaseong, Gyeonggi-do in 2019, and this time it has announced that it will directly run a professional baseball team.
A new world of professional baseball team + distribution
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| ▲ What will the combination of E-Mart and professional baseball team look like? An official of Shinsegae Group said, “We plan to show that it is possible not to move from distribution to other fields, but to combine the opposite (distribution) in non-distribution areas such as sports.” (Provided by E-Mart and SK Wyverns) | |
Shinsegae Group announced on the 26th that it signed a memorandum of understanding (MOU) with SK Telecom to acquire SK Wyverns for 135.2 billion won. It is a method of taking over 100% of SK Wyverns, which has been held by SK Telecom. It was decided to take over the place, the athletes, and the coaching staff in Incheon.
The reason Shinsegae Group started to take over the professional baseball team is because it decided that distribution and operation of the baseball team could create business synergies. It is known that the will of Vice Chairman Chung was strongly reflected in the acquisition of the baseball team.
Vice Chairman Jeong has been focusing on creating a unique shopping mall, saying that the directions that offline retailers should pursue are’fun’ and’joy’. While maintaining the main business form of offline discount stores, it continuously introduced specialty stores with unique contents that could capture the attention of consumers. Specialty stores such as Piero Shopper, which benchmarked Japan’s unique discount stores, and boots from the UK Health & Beauty (H&B) store, which have been around for 180 years, are representative.
The start was gorgeous. Piero Shonping showed its first appearance at the COEX Mall in Seoul in 2018, and then quickly increased its stores to its 8th store. Boots have also increased to 33 stores nationwide since 2017. However, Piero Shopper and Boots succeeded in providing fun to consumers, but they could not even open their wallets. Eventually, both specialty stores were closed last year without overcoming the limit of profitability.
This failure made a change in Shinsegae’s business strategy inevitable. Rather than creating interesting content to attract consumers, on the contrary, it intends to combine distribution where there are consumers who enjoy interesting content.
Pro baseball is quite attractive content for this strategy. Prior to the Corona 19 incident, the annual number of spectators directly visiting the baseball field reached 8 million, and the loyalty of individual fans to each club was high. It’s enough to catch consumers’ footsteps from a’fun’ perspective. In particular, in the form of consumption, the proportion of intangible products such as leisure and entertainment is increasing from traditional tangible products such as clothes, shoes, and bags. For this reason, professional baseball, which can be enjoyed online and offline, can be a core service in a situation where the biggest challenge in the distribution industry is to increase the residence time of consumers.
Shinsegae Group official said on the 26th <오마이뉴스>In a conversation with the company, he said, “We plan to show that it is possible not to move from distribution to other fields, but to combine the opposite (distribution) in non-distribution areas such as sports.”
Intersection of baseball fan base and online market → 20s and 30s
He said, “The 8 million professional baseball spectators are limited to offline,” he said. “There are not a few people who watch baseball every day or do community activities without going to the baseball field, but these are the customer bases optimized for online and offline integration, which the retail industry is paying attention to.” Explained.
In particular, Shinsegae expects that the professional baseball team will play a big role in attracting the’fans’ of the younger generation in their 20s and 30s. Retail dinosaurs such as E-Mart, who belatedly entered the online business, are struggling with the current consumption of millennials (a generation born between the early 1980s and early 2000s) such as Coupang and Market Curly.
In this situation, Shinsegae believes that professional baseball, with about 60% of the audience being young people in their 20s and 30s, can be a platform optimized for target marketing. Shinsegae said, “We paid attention to the fact that the thick baseball fan base matches the leading customer base in the online market. We will provide new experiences and services to customers who visit the baseball field so that they can become’Shinsegae fans’ outside the baseball field.” Said.
The industry outlook is no different. EBest Securities analyst Oh Rin-ah published a report on the 26th, saying, “With the acquisition of a professional baseball team, it is expected to be able to combine functions such as experiences and experiences that offline platforms have strong points with the existing distribution channels of Shinsegae Group.” “We believe that target marketing is possible for generations who will lead consumption in the future as they are in their 20s to 30s and the female audience is also increasing.”
Jeong Yong-jin’s challenge, this time?
Right now, Shinsegae Group announced that it will evolve the Incheon Munhak Stadium, which will be used as the home stadium of the new baseball team, into a’lifestyle center’ that combines customer experience and distribution know-how.
An official of Shinsegae Group said, “Creating a lifestyle center does not mean that we will simply add a few more E-Mart 24 or increase related stores. We will make the baseball field a space where customers can experience more Shinsegae and spend more time. I will make it.”
Another official of the group also said, “We plan to combine it with shopping and distribution contents, starting from the leisure and leisure of baseball,” and said, “Not only no-brand stores and no-brand burgers, but also various categories of related products and services such as household goods and pet supplies. “We will develop it.”
Shinsegae’s acquisition of SK Wyverns and the construction of a Dome Stadium are also attracting attention as the Cheongna district complex development is also drawing attention.
On this day, Shinsegae said, “To create an era of 10 million professional baseball spectators with fans, we plan to actively expand infrastructure by collecting opinions from fans, local communities, and related organizations and promoting the construction of multi-purpose facilities including the dome stadium in the long term.” Revealed.
Accordingly, there is a high possibility that the development of a complex theme park that combines a baseball field, a shopping center, and a hotel, rather than a simple shopping mall, will be promoted here in conjunction with’Starfield Cheongna’, a complex shopping mall currently being promoted in Cheongna District.