Responding to the rapidly changing and increasingly challenging consumer demand, Shinsegae Food, the top Korean food company, now strives to accomplish customer satisfaction and create a healthy food culture. It is undeniable that Shinsegae Food has been widely successful in both its profit returns and shareholding management. The majority of its financial status currently derives from E-mart and Shinsegae Chosun Hotel that make up 46.1% and 8.6% of the overall Shinsegae stock market, respectively. Evidently, Shinsegae, not just its food department, is aggressively pursuing creation of its own brands and the profitable expansion of existing brands. Its business progression is evinced by the growth of Starfield Hanam, established by Shinsegae as a world-class “shopping theme park.”
With this food industry continuously innovating and aggressively expanding its influence in the domestic food market, the company now aims to uphold its corporate social responsibility through a business approach that endeavors economic, social, and environmental benefits while maximizing profits in order to cement its status as a “powerhouse corporation” that is an industry leader, both domestically and globally. Unfortunately, mere premium dining services and restaurant businesses are too simple for the vision that Shinsegae Food strives to achieve. Most of all, there is a clear need for an effective platform that conveniently connects people to the services they need. Along with its successful moves toward embracing domestic growth, a feasible future for Shinsegae Food is an extensive vision for international growth.
On its part, SSG already is planning an entry into the American culinary market by opening the “PK market” to provide a wide array of international tastes by 2019. However, its success may plausibly lie in Vietnam.
The demand for the the products offered by SSG is clear. According to The Korean Herald, “Asian production companies and Vietnamese viewers are eagerly emulating Korean lifestyle.” This translates to a growing Korean presence in Vietnam, with investment topping national ranking since 2014. As a matter of fact, more than 4,000 Korean companies, manufacturers like Samsung Electronics and LG, now maintain operations there with double the number of Japanese firms.
What makes Vietnam stand out from various other Southeast Asian countries, however, is that bilateral trade between Vietnam and Korea has already reached $63.9 billion in 2017, which confirms Vietnam as the fourth largest trading partner of Korea. Furthermore, Vietnam’s generally high level of public safety that ensures “good public order, stable politics, and a large number of young workers” further makes it an attractive market.
It is also noteworthy that its populace mostly consists of low-income laborers and workers who rely heavily on motorcycles as their main transportation system. With the number of low income laborers in Vietnam increasing from 53.3 million in 2016 to 53.7 million in 2017, SSG must be mindful of the increase in this population group in the Vietnamese society and create a business strategy that directly addresses the demands of this particular group of consumers. With these factors in mind, through a successful entry into the Vietnamese market, SSG can perhaps better attain its ambitious goal of international expansion.
– Jennie Yeom (’20)
Featured Image: Shinsegae Food