Chung Yong-jin, chairman of Shinsegae Group, recently met with President-elect Donald Trump and Tesla Chief Executive Officer (CEO) Elon Musk, attracting attention to the direction of Shinsegae Group's business in the United States.
According to the retail industry on the 23rd, Chung stayed at Mar-a-Lago Resort in Florida, where President-elect Trump resides, from the 16th for 5 nights and 6 days. Initially, he planned to stay for 3 nights and 4 days, but extended his stay to 5 nights and 6 days for meetings with the president-elect and others.
This meeting is rumored to have been arranged at the invitation of Trump Jr., who helped facilitate Trump's return to power. The two are reported to have met for the fourth time this year.
Among domestic political and business figures, Chung is the first to have contact with President-elect Trump. As such, there are observations in some sectors of the industry that Shinsegae Group's business in the United States could create synergies.
According to a quarterly report submitted to the Financial Supervisory Service by E-Mart last month, E-Mart operates a retail holding company called PK Retail Holdings in the United States. Through this, E-Mart acquired the retail company Good Food Holdings for 324.2 billion won in 2018, followed by the acquisition of New Seasons Market for 239 billion won the following year.
Currently, E-Mart operates five retail brands: Bristol Farms, New Seasons Market, Metropolitan Market, New Pundal Market, and Lazy Acres Natural Market, with a total of 56 stores as of the end of October.
Additionally, the local corporation's Oregon plant produces 2 million packs of frozen and refrigerated processed foods annually, supplying them to Trader Joe's, Costco, and Kroger.
In 2022, E-Mart acquired the California Napa Valley winery Shafer Vineyards for about 300 billion won, and added Altimeter Vineyards to establish a foundation for premium wine production and distribution last year.
At the time of the launch of the Trump administration's first term in 2017, E-Mart's business in the United States was virtually nonexistent. However, as the second term approaches, the scale of the business has grown quite significantly.
E-Mart's sales in the United States increased from 1.58 trillion won in 2020 to 2.09 trillion won last year. During the same period, operating profit rose from 9.1 billion won to 35.2 billion won. Cumulative sales in the third quarter of this year have increased by about 29% compared to the same period last year. Cumulative operating profit reached 34.2 billion won, nearly equaling last year's total operating profit. The share of E-Mart's total sales attributed to the U.S. business grew from 6.2% in 2022 to 7.5% in the third quarter of this year.
E-Mart is poised to expand its business into the technology sector. In February this year, it established the overseas investment corporation Pacific Alliance Ventures under PK Retail Holdings and made a new investment in a Series B funding round (about 50 billion won) conducted by the artificial intelligence (AI) startup Butler in August.
Butler, a spin-off from MIT Media Lab, analyzes how people move indoors through temperature-sensing sensors and AI technology.
In the industry, it is interpreted that E-Mart decided on this investment with an eye toward utilizing this technology at its retail points, such as E-Mart and Starfield. There is also analysis that they are seeking opportunities in overseas markets, away from the saturated domestic market. According to E-Mart's quarterly report, the size of the U.S. grocery (food and beverage) market was $884.8 billion last year, growing 2% from the previous year.
However, U.S. wine consumption decreased by 2.8% last year, showing a downward trend. In this regard, E-Mart stated in its quarterly report that "the premium wine market maintains relatively stable demand, and the increase in demand for premium wine in some emerging Asian markets will provide new opportunities for Napa Valley wineries."
According to industry sources, Chung has been directly managing overseas business. To this end, in 2021, he purchased a luxury mansion in Beverly Hills, California, for $19.2 million, equivalent to about 22.5 billion won at that time.
Chung, who returned home the previous afternoon, told reporters at Incheon International Airport, regarding his conversation with the president-elect, that "I cannot disclose specific details." When asked if he discussed plans for expanding the U.S. business, he replied, "Expansion plans are business matters that I think should not be discussed here."
A Shinsegae Group official noted that "the U.S. business is strongly characterized by being operated independently by local professional managers" and that "there has been no sharing of direction for the U.S. business yet."