Shinsegae's Gangnam branch becomes first Korean store to crack 3 trillion won

Shinsegae Department Store's Gangnam branch became Korea's first department store to record sales of more than 3 trillion won. VIP members accounted for nearly 50 percent of its total sales.

Shinsegae Department Store's Gangnam branch is located in Seocho District, southern Seoul. [SHINSEGAE]

The Gangnam branch of Shinsegae Department Store recorded sales of more than 3 trillion won ($2.3 billion) this year, becoming Korea's first department store to achieve the feat.

The Gangnam store’s sales exceeded the threshold on Wednesday, Shinsegae Department Store said on the same day. Only a handful of establishments worldwide have done so, including Harrods Department Store in London and Isetan Department Store in Shinjuku, Tokyo.

It had been four years since the department store’s annual sales first exceeded 2 trillion won in 2019, which was a first for a Korean retailer at the time.

A large portion of the branch's success can be attributed to the store’s so-called VIP members, whose purchases made up 49.9 percent of total sales, according to Shinsegae’s news release. That's almost 15 percent higher than the proportion of sales that VIP members accounted for at other Shinsegae stores, which averaged 35.3 percent.

Customers can gain VIP club membership by meeting certain spending criteria.

Shinsegae cited the quality of its promotion and range of goods as the most important reason that customers visit its Gangnam location. The store hosts more than 1,000 brands, one of the highest numbers of any Korean store, including Hermès, Louis Vuitton and Chanel, three of the most sought-after luxury brands in Korea.

The Gangnam store also hugely benefited from its location, which is a neighborhood where many high-income households are concentrated. Residents of newly constructed apartment complexes in Gangnam boosted homeware sales by 35.7 percent this year.

The store is also easily accessible by public transportation, and 50.3 percent of its total sales were made to customers who had come from outside of Seoul.

Shinsegae also cited the store’s successful marketing of “MZ catered” street fashion and emerging designer brands to customers in their 20s and 30s.

Around 40 percent of the department store’s customers were people in their 30s or younger, with 10 percent of sales coming from shoppers in their 20s. Half of total sales to new customers came were made to those in their 20s and 30s.

Purchases from foreign tourists also jumped by 587 percent compared to last year and contributed hugely to Shinsegae's total sales.

To commemorate its landmark achievement, Shinsegae will give all of its members reward coupons that can be spent, like cash, in its department stores from Dec. 26 to 31. It will also hold giveaways next January.

“As a global department store representing Korea, Shinsegae, as a content creator, will go one step further to deliver value beyond shopping to customers,” Shinsegae CEO Park Ju-hyung said.

BY KIM JU-YEON [kim.juyeon2@joongang.co.kr]