BUSINESS

Shinsegae opens mega department store in Daegu

By Won Ho-jung
  • Published : Dec 13, 2016 - 15:38
  • Updated : Dec 13, 2016 - 15:38
DAEGU -- Retail giant Shinsegae is wrapping up the year with the grand opening of Daegu Shinsegae on Thursday, bringing a large-scale shopping and entertainment complex to the southern city connected to a transportation complex.

The giant department store, which has more than 103,000 square meters of operating space, is Shinsegae Department Store‘s second large-scale branch outside of Seoul, following the Centum City branch in Busan. In addition to the traditional shopping areas, Daegu Shinsegae has a rooftop aquarium, indoor and outdoor mini theme parks, an art gallery and a concert hall. 

Employees prepare for a preopening event at Daegu Shinsegae. (Won Ho-jung/The Korea Herald)

Shinsegae invested a total of 880 billion won ($755 million) into the project, the largest amount for any single Shinsegae Department Store branch.

Daegu Shinsegae, which is operated by a newly created Shinsegae entity in Daegu, shares four floors with the new Dong-Daegu Intermodal Transfer Center. The transfer center is the culmination of a five-year project together with the Daegu Metropolitan City Government and the Ministry of Land, Infrastructure and Transport, and includes access to KTX trains, buses and subway trains.

“We hope to utilize the intermodal transfer center in order to create a network of consumers in nearby cities. We know that we have to target consumers across the North Gyeongsang Province area, rather than just focusing on Daegu,” Shinsegae Department Store CEO Jang Jae-young told press at a preopening event at Daegu Shinsegae on Tuesday.

“In our market research, we found that Daegu consumers were unwilling to travel to other cities like Busan in order to shop, but on the other hand consumers from other cities were willing to come to Daegu,” said Daegu Shinsegae deputy chief Hong Jung-pyo.

According to Jang, the sales goal for Daegu Shinsegae would be about 600 billion won a year.

A model of Daegu Shinsegae (Shinsegae)

“Shinsegae Department Store’s branches in Seoul gain most of their revenue from selling luxury products, but that strategy will not be sufficient here,” said Hong. “So we will be making efforts to bring in a more mass consumer base with our family entertainment and young casual attractions, starting with TV ads next year.”

Jang said that more than revenue, however, Daegu Shinsegae will first focus on smooth operations and working with the local community.

As a large-scale mall opening in a smaller city, Daegu Shinsegae had faced close scrutiny about how its operations would affect local businesses. The timing of the opening has been unfortunate, coming soon after a large fire in Daegu‘s Seomun Market. In these circumstances, Jang emphasized creating shared value with the surrounding community through hiring local talent, bringing in Daegu brands into Daegu Shinsegae and affiliating with local businesses.

Another concern is controlling the traffic around the area. Other shopping malls, notably Shinsegae’s Starfield Hanam just outside of Seoul, caused traffic jams and parking shortages in the first weeks of operation, criticized for creating inconveniences for shoppers and locals. Daegu Shinsegae said that it worked to alleviate those potential problems by creating an underground entrance and working with the Daegu Metropolitan City Government.

“We hope that Daegu Shinsegae will become a landmark of Daegu, and to hear that Daegu has seen healthy growth and development with Shinsegae’s help,” said Jang. 

By Won Ho-jung (hjwon@heraldcorp.com)

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