E-Mart Increases its Stores in Accordance with China’s Middle Class Consumption Patterns

By Um Yoonsun
E-Mart's Shinsegae focuses on improving its brand image in China by participating at 2010 Shanghai Expo. During the event, E-Mart held an invitation ceremony for major delivery companies and a thesis contest targeted to college students. Through the Korean Business Pavilion, it is looking forward to highlight its efforts involved with building familiar stores, bringing top-notch services, good quality products, and convenience maximization. E-Mart's Shinsegae pursues its social contribution services and tries to show the company image of environment-friendly management.
In 1997, E-Mart was the first Korean distribution company to open its store in Shanghai. Starting by opening its first oversees store in Quyang, it founded ten more shops abroad in ten years. It opened eight stores in 2008, five in 2009 and now has a total of 24 stores ready to greet local customers. Vice President of E-Mart's Shinsegae, Jung, yongjin who is keen on carrying out businesses in China said he will make great efforts to solidify management foundations in the country. He commented that he will focus on the store expansion in China and quality improvement in manpower and profit and loss systems, as well as the centralized purchase and distribution system. Mr. Jung added that it will review the strategy to extend business in China via long-term Merger and Acquisition and strategic partnership.
Store openings began to spur with a complete opening of Chinese trade market.
Compared with the competitors, E-Mart's Shinsegae started entering into the Chinese market early on. However, at that time, the condition of entrance was not smooth at all.
Foreign companies were not allowed to have over 50% of company shares. With this circumstance, E-mart started setting up markets in both China and Korea at the same time. The action was brought by the E-Mart's intention to sharpen its competitive edge in the global market. In late 1997, with Asian financial crisis in the air, multinational distribution firms like Wal-Mart and Carrefour arrived in Korean market. E-Mart started concentrating its energy on the domestic market.
It adopted a strategy to tighten its grip on the Korean market first and then to accelerate store openings in China. Later on, E-Mart gained a firm No. 1 ground in Korea and resumed business in China from year 2002. It picked up store openings in earnest after it set up the second Ruihong store in Shanghai, 2004. Followed by this vigorous move, E-Mart consolidated its position in the Chinese distribution market. A full opening of Chinese trade market served a significant role in speeding store establishments in China. When E-Mart first advanced to the Chinese market, foreign companies like E-Mart had to have local partners to carry out its business. Both E-Mart and its local partner possessed 49% of company shares and Chinese public institutions obtained 2%. For the reason, it had faced difficulties of choosing the partner long before it even decided a building site. However, in December 2004, the Chinese distribution market became thoroughly opened and this helped E-Mart's Shinsegae to expedite its store openings in China.

Park Sae-jin swatchsjp@ajunews.com