Shinsegae, CJ strengthen partnership with joint product launches

Shinsegae Group Chairman Chung Yong-jin(left) and CJ Group Chairman Lee Jae-hyun

Following the comprehensive business cooperation agreement signed in June, South Korea’s Shinsegae Group and CJ Group are accelerating their partnership by launching jointly planned products.

According to industry sources on Monday, Shinsegae and CJ will present their first co-planned products, Jeju-style meat noodles and Yukgaejang Kalguksu kits, at Emart this week. The meat noodles feature a rich pork bone broth, while the Yukgaejang Kalguksu uses a savory beef broth.

In August, they will launch Hetbahn Ganghwa Island Rice, which differentiates itself from regular Hetbahn with a rich flavor and aroma from barley-infused water, using high-quality Ganghwa Island rice.

Despite being a premium product, Emart’s guaranteed large purchase volume ensures that the price will remain similar to existing Hetbahn products.

Hetbahn, first launched by CJ CheilJedang in 1996, holds the dominant market share in the instant rice sector in Korea, with annual sales nearing 1 trillion won, making it CJ CheilJedang’s top-selling product.

“While co-developing products often involves new items, we selected Hetbahn to leverage both companies’ strengths and provide genuine benefits to customers,” said a Shinsegae representative.

The two retail conglomerates have identified eight strategic products for joint marketing: Bibigo K-Street Food (such as Tteokbokki and Hotdogs), Bibigo frozen soups, Bibigo whole shrimp dumplings, Gourmet Sobaba Chicken, Hetbahn Multigrain Rice, Hetbahn Sotbap, Beksul 1-Minute Ring, and Beksul One-Plate Sauce.

Emart, with its strong offline presence, will support the sales growth of CJ CheilJedang’s strategic products through initiatives like pop-up stores.

CJ aims to double the sales of these eight product categories compared to last year, utilizing viral digital content for joint marketing efforts.

Both companies plan to continue modifying existing products for collaboration this year. However, next year they intend to merge their customer data and product development expertise to create new products. This initiative has seen recent discussions between Emart CEO Han Chae-yang and CJ CheilJedang CEO Kang Shin-ho.

On June 5, the CEOs of Shinsegae Group and CJ Group signed a business cooperation agreement. Following this, regular meetings involving executives and team leaders from Shinsegae, CJ Holdings, and CJ Logistics have been established to explore synergy creation in logistics, food, media, and membership sectors.

Since July 1, CJ Logistics has been exclusively handling the Smile Delivery volumes (an average of 2.5 million orders per month) for Shinsegae’s leading e-commerce platform, Gmarket. This marks the first step in e-commerce logistics, a core aspect of the alliance.

“In a month or two, customers will be able to receive products they order from Gmarket the next day if they place them by midnight, thanks to our delivery services,” said a CJ Logistics representative. “We are also in talks regarding the logistics center and delivery outsourcing for SSG.com.”