Shinsegae to invest record W3.35tr

Shinsegae Group, South Korea’s largest retailer, plans to invest a record amount of 3.35 trillion won ($3.1 billion) in multishopping malls and online businesses, group officials said Monday.

The figure is about a 50 percent jump from last year’s investment budget of 2.2 trillion won, and a 46 percent hike from 2.3 trillion won in 2013, the highest value on record.

The company said it was considering increasing the investment even more, depending on market conditions.

“Through the massive investment, we hope to stimulate the domestic economy and find future growth, amid slowing market conditions,” a group spokesman said in a statement.

The group’s 2015 investment plan is part of its 10-year business blueprint, “Vision 2023,” which aims to inject 31.4 trillion won into multishopping malls and online platforms to generate 88 trillion won in sales by 2023.

This year it is largely focused on building multishopping complexes in satellite cities of Seoul, including Incheon, and expanding its department store in Gangnam-gu, according to the company.

“We’ll actively take in foreign investments for large-scale projects, such as multishopping complexes,” the officials said.

Market insiders say the group is accelerating its efforts to compete with aggressively expanding global retail giants, including China’s Alibaba Group.

Amid worries that retail giants like Alibaba could deal a crushing blow to South Korean retailers, even the dominant Shinsegae Group’s discount mall chain E-mart is planning to flex its spending muscles online.

According to the firm, new E-mart outlets will be about three to five times bigger than the average stores and it will create six online logistics centers by 2020.

Shinsegae Group is currently focusing on opening fashion-oriented premium outlets across the country, including dining facilities and cinemas.

More recently, it invested 800 billion won in building a shopping complex in Daegu, similar to Shinsegae Centum City in Busan. The Daegu outlet will house a theme park and shopping mall in a nine-story building with seven underground levels.

By Suk Gee-hyun (monicasuk@heraldcorp.com)