GS Retail celebrates combination with GS Home Shopping
GS Retail celebrated its merger with GS Home Shopping Thursday, saying that the new entity—also called GS Retail—will be a major player in the highly competitive retail markets.
The companies, in which GS Holdings had major stakes, agreed to combine late last year.
As of last year, GS Retail and GS Home Shopping together generated 400 billion won ($360 million) in operating profit on 10 trillion won in annual sales.
According to the company, the operating profit was the largest of all listed retailers in Korea.
As of last year, Emart generated 22 trillion won in sales, followed by Lotte Shopping with 16.2 trillion won.
The new GS Retail will be operating 15,000 offline stores, 10 digital commerce platforms, including GS Fresh Mall, and 60 logistics centers that span around 400,000 square meters.
The company expects its offline stores to function as delivery hubs, like small-scale warehouses that are close to consumers to enable quick delivery for orders placed online.
As part of the plan to expand quick delivery for online orders, GS Retail in April last year acquired 19.53 percent of Mesh Korea, an operator of delivery service provider Vroong. The start of the on-foot delivery service last year for people who order products from GS25 convenience stores was also part of the scheme.
The merged GS Retail, which also runs Lalavla health and beauty stores, will be adding 12 million new members from GS Home Shopping.
GS Retail had 14 million members before the merger.
“GS Retail is probably the only retailer that can create synergy effects by combining 15,000 offline platforms nationwide with digital and home shopping commerce [platforms],” said Huh Yeon-soo, GS Retail CEO, in a statement.
Huh vowed to offer value to consumers in the retail industry where boundaries between online and offline platforms are “crumbling.”
Analyst Nam Seong-hyeon from Hanwha Investment & Securities said the new GS Retail will be able to diversify product types sold online and gain stronger buying power when it comes to negotiating product prices with its sellers.
GS Retail is one of the many retailers that are either merging or acquiring competitors to survive the cut-throat competition within e-commerce market led by several players, including Naver, Coupang and Emart, which recently agreed to acquire eBay Korea.
“Retail has traditionally been a winner-takes all industry,” said Prof. Lim Chae-un, who teaches marketing at Sogang University. “Driven by the rapid expansion of online market that was triggered by Covid-19 last year, retailers are currently trying to enlarge the company size in order not to be left out.”
BY JIN MIN-JI [firstname.lastname@example.org]