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- Lee Seung-gun’s Bold Bet: Offering KRW 1 Million Interview Bonus, Aims to Soar with Toss Advertising and Shopping
- Lee Seung-gun, CEO of Viva Republica, is taking aggressive steps to expand teams in high-margin revenue businesses such as advertising and commerce.
This is seen as a strong signal of his commitment to solidifying the company’s profitability, following the company’s first-ever annual net profit last year. With Viva Republica currently preparing for an initial public offering (IPO) on the U.S. stock market, boosting profitability to enhance corporate value has become a critical task.
According to Toss on April 25, the company is holding a focused hiring event through May 11 for server developers and machine learning (ML) engineers in the advertising and commerce (shopping) divisions.
The company is offering an unprecedented incentive: KRW 1 million (US$ 720) to every candidate who completes the first round of job interviews for those roles.
Toss had previously held a large-scale recruitment drive in the second half of 2022 across all its affiliates, hiring up to 300 people and awarding KRW 1 million (US$ 720) in “growth support funds” to 400 randomly selected applicants who passed the resume screening.
This time, however, the hiring focus has narrowed specifically to IT developers in the advertising and commerce sectors—highlighting these as key business areas for the company in 2024.
On the previous day, Lee attended a meetup held at Toss’s office in Yeoksam-dong focused on advertising and commerce businesses.
He spoke about why Toss is entering the advertising and commerce industries, what services, products, and technologies it aims to develop, and presented a vision for Toss’s business direction and strategy over the next five years.
The meetup was attended by key leadership including Lee himself, Park Woong-do (Head of Toss Commerce), Kim Hyun-joon (Head of Commerce Tech), Kim Hyung-bin (Head of Toss Advertising), Lee Hang-ryeong (Head of Server Division), and Kim Hong-soo (Head of Data Business).
Advertising is one of the most representative revenue models for Toss as a platform business.
Platform businesses usually start with free services to attract users and traffic, which often entails early-stage deficits. Once the platform scales, advertising and commission-based revenue models are introduced.
Toss began with a simple, fee-free money transfer service and has grown into a platform with 28.4 million users. As a result, its advertising and commission-based services are steadily growing.
The consumer services division—which includes advertising, loan brokerage, simple payments, tax services, and securities—accounted for 36.4% of revenue in 2022, 42.5% in 2023, and rose to 58.2% last year. In contrast, revenue from merchant services, such as payment terminal sales, declined from 63.6% in 2022 to 57.5% in 2023, and to 41.8% last year.
The advertising business also offers high scalability. Compared to financial services, it faces relatively fewer regulatory hurdles, making overseas expansion more feasible.
In fact, Lee reportedly set a goal of making Toss Advertising not just the best in Korea, but one of the top media platforms globally.
Given Viva Republica’s current pursuit of a U.S. IPO and global expansion, the successful growth of its advertising business becomes even more critical.
Commerce (shopping) is another area Toss is strongly investing in as a future core revenue model.
It is a sector where Toss can leverage its existing user base and platform competitiveness to drive rapid growth. The business can also create strong synergy with Toss Pay and the advertising demand from sellers who want product exposure on the platform.
In December 2024, Toss revamped its app and placed “Toss Shopping” at the center bottom of the home screen—signaling its intention to elevate shopping into a core service.
Toss Shopping started in 2023 as a group-buying service within Toss Pay. In September of the same year, it evolved into an open-market platform allowing individual sellers to list and sell products. Currently, the platform has between 30,000 and 40,000 registered sellers.
On April 24, Lee posted on his personal LinkedIn account about hiring developers for advertising and commerce, stating, “Toss will carry out a large-scale recruitment of over 1,000 people this year,” adding, “This may be the last major expansion for Toss.”
He emphasized that this could be the last chance to get on board with “Team Toss,” which is poised for 10x growth.
Viva Republica posted an operating profit of KRW 90.7 billion (US$ 65.4 million) and net profit of KRW 21.3 billion (US$ 15.4 million) in 2024, marking its first-ever annual profit since its founding in 2013.
In a press release announcing the results, Lee said, “This milestone, achieved 10 years after launching the Toss application, demonstrates that Toss’s growth strategy has now matured into a stable business model,” adding, “We will continue to strengthen both profitability and growth by innovating user-centered services and advancing the platform.”
#LeeSeungGun #VivaRepublica #Toss #TossAdvertising #TossCommerce #IPO #revenuegrowth #platformbusiness #adtech #ecommerceKorea #developerhiring #Koreanstartup #profitabilitydriven #TossExpansion
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- Bom Kim Isn’t Satisfied with KRW 40 Trillion—Why Taiwan Holds the Key to Coupang’s Global Expansion
- “Cross-border e-commerce (CBEC) is emerging as the next growth engine for domestic e-commerce operators.”
This is an excerpt from the report “The Current Status and Challenges of the E-Commerce Market Entering Maturity,” published by Samjong KPMG Economic Research Institute.
Bom Kim, Chairman of Coupang’s Board of Directors, has once again rewritten the records in the Korean retail industry. As of 2024, Coupang surpassed KRW 41 trillion (US$ 29.6 billion) in annual revenue, becoming the first company in the domestic retail sector to enter the “KRW 40 trillion era.”
It also posted an operating profit of more than KRW 600 billion (US$ 432.6 million), earning praise for securing not only “growth in scale” but also “profitability.” Along with its e-commerce business, Coupang’s diversification efforts such as Coupang Eats (delivery) and Coupang Play (content) are also now on a full track.
However, despite this success, Bom Kim’s attention is focused on the “limits.” The question, “Why doesn’t Coupang stop expanding?” reflects his concern over the structural constraints of the Korean domestic market.
◆ Why success in Korea still brings unease: the limits of domestic demand
Coupang’s core lies in its e-commerce business, centered on Rocket Delivery. Utilizing its self-built logistics infrastructure, Coupang rapidly took over the Korean e-commerce market with fast delivery and an intuitive user experience.
South Korea is one of the countries with the highest online shopping usage rates in the world, with well-established demand and infrastructure for mobile payments. These unique characteristics of the Korean market played a decisive role in Coupang’s rapid growth.
The issue is “sustainability.” With a limited market size of around 50 million people and a competition structure close to saturation, these factors act as major obstacles to Coupang’s long-term growth.
New businesses such as Coupang Eats and Coupang Play, which were launched to overcome these limitations, mostly serve as complements to retain Rocket Wow members. Since Coupang’s core is e-commerce, long-term expansion relying solely on the domestic market remains difficult.
◆ Global expansion starts with Taiwan, and results are becoming visible
To overcome these limitations, Bom Kim first chose Japan. However, the “quick commerce” model launched on a trial basis failed to take root in Japan, where convenience store-based consumption habits are deeply entrenched, and Coupang ultimately decided to withdraw from the Japanese market after two years.
The next market Bom Kim selected was Taiwan. Coupang currently operates two logistics centers in Taiwan, and in 2024, it launched its paid membership service “Rocket Wow,” officially introducing the same business model used in Korea.
Coupang’s business in Taiwan appears to be going smoothly. The number of Coupang app downloads in Taiwan is steadily increasing, and according to Coupang Inc’s Q4 2024 earnings release, Taiwan Rocket Delivery’s net revenue increased by 23% compared to Q3.
Bom Kim cited the successful application of the so-called “Korean playbook” as the reason for the replication of Korea’s success in Taiwan. This playbook includes logistics network-based Rocket Delivery, a paid membership program, and intuitive UI/UX.
In the Q4 2024 earnings conference call, Kim stated, “Taiwan is a representative case where the playbook we created in Korea has been successfully applied.”
◆ Why Taiwan? A market structure optimized for the Coupang model
Coupang’s Rocket Delivery model requires physical conditions that can maximize logistics efficiency. The key factors are a compact landmass, high population density, and a consumption structure centered on the capital region.
From this perspective, Taiwan shares market characteristics similar to Korea. Population is concentrated around the capital, Taipei, and according to English Wikipedia, Taiwan ranks 10th in the world for population density—seven places ahead of Korea, which ranks 17th.
Taiwan also has a digitally savvy consumer base accustomed to online shopping and electronic payments, just like Korea. For Coupang, Taiwan is essentially a “second Korea.”
◆ What’s next? Likely focus on compact, fast markets
Coupang’s global strategy is likely to focus on “selection and concentration” rather than spreading itself too thin. Because the emphasis is more on logistics than on the platform, concentrating on countries where logistics infrastructure is easy to build minimizes risk and supports business growth.
From this standpoint, Southeast Asia’s major urban countries are strong candidates for Coupang’s next logistics business expansion.
Countries like Singapore, Malaysia, the Philippines, Vietnam, and Thailand all feature high urban population densities, rapid growth in online shopping and mobile payments, and are not yet fully dominated by global platforms like Amazon.
Coupang is unlikely to completely abandon developed markets like Japan. However, learning from its failure there, it is expected to adopt a different strategy than it uses in Taiwan or Southeast Asia.
On January 14, 2025, Coupang began pilot operations of Coupang Eats in Minato City, Tokyo. Unlike the capital-intensive logistics business, this signals a return to Japan with a platform-based approach.
A source from the logistics industry stated, “Coupang’s business model inherently involves a ‘planned deficit’ phase, due to massive investments in building logistics centers and user acquisition costs through discounts and events. Taiwan is likely to follow this same structure: incurring initial losses to expand, then generating profits based on that expansion.”
#Coupang #BomKim #RocketDelivery #Taiwanexpansion #ecommerceKorea #CoupangEats #CoupangPlay #crossborderecommerce #logisticsinfrastructure #SoutheastAsiamarket #Koreanplaybook #planneddeficit #globalstrategy
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- Yang Jong-hee’s Second Term at KB Financial Begins Strong with Earnings Momentum and Innovation Confidence
- Yang Jong-hee, Chairman of KB Financial Group, has made a strong start in the first quarter of his second year in office.
Despite concerns over interest rate cuts, high exchange rates, and domestic and international political uncertainty, KB Financial recorded its highest-ever first-quarter net profit by demonstrating the solid fundamentals of both its banking and non-banking portfolios.
This performance is expected to provide strong momentum toward achieving the group's goal of securing its position as a leading financial group in both financial performance and value enhancement.
According to KB Financial on April 24, the company posted a consolidated net profit (attributable to controlling interests) of KRW 1.6973 trillion (US$ 1.22 billion) in the first quarter of 2025. This represents a 62.9% increase from the same period in 2024, when heavy losses from Hong Kong H-Index equity-linked securities (ELS) were recorded, and it far exceeded the securities market's consensus estimate of around KRW 1.5 trillion.
Even when compared to the Q1 2024 net profit of KRW 1.5929 trillion (US$ 1.14 billion), excluding the ELS-related losses, the figure still represents a 6.5% increase, setting a new quarterly record.
The growth trend is clearly gaining momentum.
Given the stronger-than-expected first-quarter performance, KB Financial's full-year 2025 net profit forecast may be revised upward. Financial data provider FnGuide currently estimates KB Financial’s net profit for this year at around KRW 5.5 trillion (US$ 3.96 billion).
In his first full year in office in 2024, Yang led KB Financial to become the first domestic financial holding company to exceed KRW 5 trillion (US$ 3.6 billion) in annual net profit, maintaining its top position among the four major financial groups. This year, the gap with rival Shinhan Financial Group (KRW 5.0197 trillion or US$ 3.61 billion) is expected to widen, further solidifying its title as the leading financial group.
Above all, KB Financial has proven its profit-generating power by continuing to grow despite a challenging business environment, including major ELS compensation payouts last year, interest rate cuts, political instability, and high exchange rates this year.
Chairman Yang has thus secured the momentum to tackle key challenges such as value enhancement and the normalization of overseas operations.
As he entered his second year in office, Yang began to show his leadership style more clearly in organizational structure and executive appointments, and he is now fully implementing corporate value enhancement plans—one of the top priorities for financial holding companies.
This is considered a crucial period in which he must prove his true leadership skills and performance.
At the regular shareholders' meeting in March, Yang stated, “In 2025, KB Financial will strive to firmly establish its position as a leading financial group not only in terms of financial performance but also in value creation.”
He added, “We will respond to the rapidly changing business environment with quicker innovation and transformation than others,” emphasizing, “We will deliver unwavering results in all three areas—executing the value-up plan, managing asset quality, and ensuring the stable management of client assets.”
The first step has been a solid one.
The company’s performance this quarter is seen as proof of its portfolio competitiveness and capital management capabilities, which support the core value-up pillars of ‘profitability’ and ‘soundness.’
In Q1, the share of profit from non-banking businesses rose to about 42%, helping offset the decline in interest income due to falling market interest rates. KB Kookmin Bank also recovered from last year’s ELS-related downturn by increasing core deposits and reducing funding costs.
The group also scored well in capital soundness management. As of Q1, KB Financial’s Common Equity Tier 1 (CET1) ratio stood at 13.67%, up 0.16 percentage points from 13.51% at the end of last year.
This CET1 ratio is directly tied to the shareholder return policy that Chairman Yang personally announced in October 2024. KB Financial stated that any capital above the 13% CET1 threshold at the end of 2024 would be used as the first round of shareholder return funds in 2025, and capital exceeding 13% during the year would fund share buybacks and cancellations in the second half.
Indeed, just before announcing the earnings results, the board resolved to buy back and cancel KRW 300 billion (US$ 216 million) worth of treasury shares from April 25 to July 24. KB Financial had already repurchased KRW 519.9 billion (US$ 374 million) worth of shares by April 14, executing its February plan to buy back and cancel KRW 520 billion (US$ 374.7 million) in treasury stock.
This raises expectations for further shareholder returns in the second half.
Even after delivering stable financial results last year, Chairman Yang emphasized a “refresh” management approach.
In addition to strengthening competitiveness in core business areas, he also highlighted innovation to secure future growth engines in digital, artificial intelligence (AI), and non-financial businesses.
During year-end executive appointments in 2024, Yang reshuffled leadership by naming Lee Hwan-joo, then-CEO of KB Life Insurance, as the new head of KB Kookmin Bank—a surprise move—and also replaced CEOs at KB Kookmin Card and KB Life Insurance as part of the refresh strategy.
Na Sang-rok, Executive Director of Finance at KB Financial, commented on the Q1 earnings: “Although interest income declined due to falling market interest rates, net interest income remained at Q4 2024 levels thanks to the inflow of core deposits,” and added, “Even in an unfavorable business environment, our well-balanced portfolio—KB’s core strength—allowed non-banking affiliates to expand their earnings, resulting in solid performance.”
#YangJonghee #KBFinancialGroup #Q12025earnings #KookminBank #nonbankgrowth #CET1ratio #valueup #shareholderreturn #AIfinance #Koreanfinanceleader
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- SK hynix Surpasses Samsung in 40 Years, Wins on Earnings and Next-Gen Memory Tech like HBM4 and SOCAMM
- SK hynix is now considered to have surpassed Samsung Electronics not only in terms of profitability but also in technology, 40 years after it began its memory semiconductor business.
Leveraging its advanced high-bandwidth memory (HBM) technology, SK hynix last year for the first time surpassed Samsung Electronics in annual operating profit. In the first quarter of this year as well, SK hynix posted KRW 4 trillion (US$ 2.88 billion) more in operating profit than Samsung.
Moreover, in next-generation memory technology—including advanced DRAM processes such as 1c and 1d, sixth-generation HBM4, the low-power memory module ‘SOCAMM’ being developed by NVIDIA, and the industry-leading 4D NAND flash—SK hynix is ahead of Samsung.
On April 24, SK hynix announced that in the first quarter of this year, it recorded sales of KRW 17.6392 trillion (US$ 12.72 billion), operating profit of KRW 7.4405 trillion (US$ 5.36 billion), and net income of KRW 8.1082 trillion (US$ 5.85 billion).
Compared to the same period last year, sales increased by 42% and operating profit by 158%. This marks the second-highest quarterly sales and operating profit in the company’s history. Notably, the operating margin has improved for eight consecutive quarters, reaching 42% in Q1.
According to securities firms, Samsung Electronics’ memory semiconductor operating profit for Q1 is estimated at KRW 3.3 trillion (US$ 2.38 billion). The gap in operating profit between SK hynix and Samsung exceeds KRW 4 trillion (US$ 2.88 billion).
In Samsung’s semiconductor (DS) division, the foundry and system LSI business units are estimated to have posted a combined loss of around KRW 2.5 trillion (US$ 1.8 billion) in Q1, with total quarterly operating profit at about KRW 800 billion (US$ 576 million).
In 2023, SK hynix achieved annual operating profit of KRW 23.5 trillion (US$ 16.95 billion), surpassing Samsung Electronics in annual semiconductor operating profit for the first time in its history. Samsung Electronics recorded operating profit of about KRW 20.54 trillion (US$ 14.82 billion) in its memory division and KRW 15 trillion (US$ 10.82 billion) across the entire semiconductor division.
This marks a milestone 40 years after SK hynix, originally Hyundai Electronics, began its semiconductor business with a successful test production of 16Kb SRAM on December 16, 1984, overtaking Samsung in performance.
The reversal of fortunes over four decades was driven by SK hynix’s HBM technology. Samsung had discontinued HBM development, judging it to lack market potential, but SK hynix continued to develop it steadily.
Since the explosive growth of the AI market in 2023, high-speed, high-capacity memory semiconductors have become essential for AI training and inference. HBM, ideally suited for this purpose, has emerged as a core memory in AI chips (GPUs).
SK hynix became a key supplier of HBM to NVIDIA in 2023 and benefited from the AI boom. In contrast, Samsung Electronics repeatedly failed to obtain NVIDIA’s HBM certification and missed out on full-scale benefits.
The gap between SK hynix and Samsung Electronics is expected to persist, as SK hynix is accelerating development of next-generation memory semiconductor technologies.
In particular, SK hynix is leading in DRAM process technology—the foundation of memory semiconductors.
Advanced DRAM processes have progressed from 1x (1st gen), 1y (2nd gen), 1z (3rd gen), 1a (4th gen), 1b (5th gen), to 1c (6th gen), with each generation reducing line width to enhance performance and power efficiency.
While Samsung reportedly stabilized its 5th-generation 1b process only this year, SK hynix succeeded in mass-producing DDR5 using the 1c process—the world’s first—in August last year. As of this month, the company’s 6th-generation 1c process yield reportedly reached 80%.
SK hynix has also moved early into the 7th-generation 1d process, forming a development team in January this year. Samsung is said to have just formed its own 1d process team this month, with some analysts saying it has yet to stabilize the 1c process.
The same trend applies to HBM, which is made by stacking DDR5 produced using advanced DRAM processes. SK hynix is preparing to supply 6th-generation HBM4 with 12-high stacks to NVIDIA. The company plans to complete mass production readiness in the second half of this year and begin production next year.
Samsung Electronics has not yet secured NVIDIA certification for its 5th-generation HBM3E with 12-high stacks. So far, it has only been supplying HBM3 and HBM3E with 8-high stacks.
In the development of ‘SOCAMM,’ a next-generation low-power memory module for AI servers being led by NVIDIA, SK hynix is also ahead of Samsung.
In March, at the “GTC 2025” event in San Jose, California, SK hynix and U.S.-based Micron showcased the actual SOCAMM module. Samsung has yet to reveal a physical product.
SOCAMM is expected to be installed in NVIDIA’s upcoming AI chip “Blackwell Ultra (GB300),” set for production in the second half of this year. Known for its low power consumption, SOCAMM is likely to be used in future autonomous vehicles, AI supercomputers, and robots. Gaining an early lead in the SOCAMM market is expected to greatly impact future competitiveness in memory semiconductors.
Beyond DRAM, SK hynix also holds a technological edge in NAND flash.
In November last year, SK hynix became the first in the world to successfully mass-produce 321-layer 1-terabit (Tb) 4D NAND, surpassing the 300-layer threshold. Samsung has set a target to begin production of 400-layer NAND this year, but its current products are estimated to be in the 280 to 290-layer range.
#SKhynix #SamsungElectronics #HBM #DRAM #SOCAMM #NANDflash #AIsemiconductor #memorychip #semiconductortechnology #techleadership
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- Heo Young-in Acquitted of Breach of Trust, But Key Trial Still Ahead—SPC Struggles with ‘Anti-Labor’ Image
- Heo Young-in, Chairman of SPC Group, has been acquitted in one criminal case and still faces another—this is the story of the judicial risks surrounding him.
The Supreme Court recently upheld the not guilty verdict in a case where Chairman Heo was accused of evading gift tax by selling shares of an affiliate at a low price.
Heo was on trial for allegedly instructing the sale of Milldawon shares—owned by SPC affiliates Paris Croissant and Shany—to SPC Samlip at an unfairly low price.
Prosecutors claimed this act was aimed at evading the so-called “gift tax on unfair business practices.” However, both the first and second trials, as well as the Supreme Court, concluded that it was difficult to recognize intent for breach of trust.
Many view this not guilty verdict as a turning point that allows SPC Group to move past its legal risks and focus on global expansion.
However, others point out that “the real trial isn’t over yet.” That’s because Chairman Heo still faces trial over allegations of attempting to undermine labor unions.
Heo is accused of pressuring around 570 union members of the Korean Confederation of Trade Unions (KCTU) affiliated with the Paris Baguette branch to withdraw from the union between February 2021 and July 2022, and of giving low performance review scores to union members in May 2021, resulting in their promotion being denied.
◆ The Persistent ‘Anti-Labor’ Image of SPC
SPC Group faced intense public backlash after a fatal accident occurred at its Pyeongtaek SPL bakery plant in 2022.
The outrage escalated after it was revealed that the company continued production immediately following the incident, prompting widespread consumer anger and a boycott campaign. On social media, the hashtag “blood-stained bread” spread rapidly.
The issue isn’t just that the image was temporarily damaged—it has continued to build over time. Even before and after the fatal accident, SPC Group was repeatedly involved in controversies over worker deaths from overwork, allegations of industrial accident cover-ups, and union suppression. Chairman Heo’s union-busting trial is seen as part of this broader pattern.
At a press conference held on October 21, 2022, shortly after the fatal bakery accident, Heo promised to “thoroughly re-inspect the group’s overall safety management system and significantly strengthen safety management to prevent recurrence.” However, less than a year later, in August 2023, another fatal incident occurred when a worker at the Shany bakery plant died after being caught in a dough mixer.
According to a report released in May 2024 by the Citizens’ Coalition for Consumer Sovereignty, a total of 502 victims of industrial accidents were recorded at SPC Group affiliates between 2017 and September 2022.
◆ The Lost Corporate Image of SPC Group—The Social ‘Trial’ Is Not Over
As a food company, SPC Group’s brand image has a critical influence on consumer decisions. Beyond basic requirements for trust, safety, and hygiene in food, corporate ethics have also become a core part of brand competitiveness.
A similar example is Namyang Dairy, which has long suffered from consumer boycotts—not due to hygiene or safety issues, but because of ethical controversies involving the owner family.
Some argue that the SPC boycott was a short-lived episode. However, SPC Samlip’s business performance has shown clear stagnation since the boycott began in 2022.
In 2024, SPC Samlip recorded consolidated revenue of KRW 3.4279 trillion (US$ 2.47 billion), a decrease of 0.15% compared to 2023. Compared to 2022—when it was hit hardest by the boycott—revenue grew only 3.42% over two years.
Its operating profit margin has remained flat at around 2.7% from 2022 through 2024.
◆ Heo Young-in’s Real Challenge: Rebuilding Social Trust, Not Just Legal Acquittals
Some argue that the real issue for SPC Group and Chairman Heo Young-in is not legal risk, but the risk of losing public trust.
SPC Group is a B2C company in direct contact with consumers, and the public and civil society often value social responsibility and ethical leadership more than legal innocence.
In fact, civic groups, consumers, and labor organizations continue to demand structural reforms and a sincere apology from SPC.
Even when “KBO Bread,” a new product released by SPC Samlip in late March, gained explosive popularity, posts continued to appear on social media urging boycotts due to its affiliation with SPC Group.
An industry insider commented, “We can’t say for certain that SPC Samlip’s stagnant sales are solely due to the boycott,” but added, “It’s hard to deny that SPC Group’s image has severely deteriorated among consumers.”
#HeoYoungin #SPCGroup #SPCSamlip #judicialrisk #boycottSPC #unionbusting #industrialaccidents #Koreanfoodindustry #brandreputation #socialresponsibility
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- Storm Clouds Over Shinsegae Fashion — William Kim’s High Salary Draws Scrutiny Amid Weak Performance
- Shinsegae International is expected to post Q1 earnings next month that fall short of already-lowered market expectations. Analysts point to underperformance in its fashion division — which accounts for over half of total revenue — as the main drag on company-wide growth.
CEO William Kim, who previously oversaw all of Shinsegae International, was reassigned solely to the fashion division in a year-end executive reshuffle amid weak performance. Given his status as the highest-paid executive in the group, pressure is mounting for him to justify his compensation with tangible results.
Observers are watching closely to see whether Kim can find a breakthrough in the struggling fashion business, which is facing both domestic consumption slowdown and adverse exchange rates.
According to financial data firm FnGuide on April 23, Shinsegae International’s Q1 2024 consensus operating profit is estimated at ₩9.6 billion (approx. $7.38 million), down 14.4% year-on-year. This continues a downward trend, following a 45% year-on-year decline in full-year operating profit to ₩26.8 billion (approx. $20.62 million) in 2023. The current estimate is also down 35% from the ₩13 billion (approx. $10 million) forecast from three months ago.
Brokerages Kiwoom Securities and NH Investment & Securities are even more bearish, estimating Q1 operating profits at ₩5.2 billion (approx. $4 million) and ₩6.1 billion (approx. $4.7 million), respectively — well below market consensus. Both have revised down their target prices by 14.3% (to ₩12,000 ≈ $9.23) and 19.2% (to ₩10,500 ≈ $8.08). NH also downgraded its investment rating from “Buy” to “Neutral.”
The gloom surrounding Shinsegae International stems from a double whammy: a domestic fashion market frozen by weak consumption and a strong U.S. dollar, which impacts its high-end import-focused business model.
Founded in 1996, the company began by importing foreign luxury fashion brands to the Korean market. Today, it still derives most of its revenue from domestic sales and holds numerous high-priced imported brands. As a result, it’s more vulnerable than peers to local economic downturns and currency volatility.
Jung Ji-yoon, an analyst at NH Investment & Securities, noted, “With a portfolio centered on expensive imported brands, sales recovery has been slower than expected. The prolonged strength of the dollar is also increasing procurement costs. Meanwhile, direct entries of global megabrands into Korea are reducing Shinsegae’s earnings visibility.”
Shinsegae International currently operates in three major segments: fashion, cosmetics, and lifestyle products. In 2023, fashion accounted for 50.7% of total sales, followed by cosmetics at 31.7% and lifestyle at 17.7%.
William Kim was appointed sole CEO in January 2023. However, in October that year, Hong-geuk Kim, CEO of Shinsegae Casa, took over the beauty and lifestyle divisions, leaving Kim solely in charge of fashion.
Born in 1972, William Kim holds a degree in accounting from the University of Colorado. He previously served as CFO at Gucci and Senior VP of Retail and Digital at Burberry, making him a seasoned veteran of global luxury brands.
The executive shuffle was widely interpreted as a response to lackluster performance under Kim’s leadership. With Shinsegae International struggling amid fashion sector woes, the group sought to strengthen business expertise and expedite decision-making.
Despite weak overall earnings, the cosmetics division is expected to have maintained solid growth in Q1. Jo So-jung, an analyst at Kiwoom Securities, said, “Cosmetics revenue likely rose 17% year-on-year. While some imported brands saw distribution downsizing, that was offset by contributions from Amuse and growth in Shinsegae’s own brands.”
Amuse, a vegan cosmetics brand targeting younger consumers with strong global recognition, was fully acquired by Shinsegae International in 2023 for ₩71.3 billion (approx. $54.85 million) under Kim’s leadership.
William Kim is the highest-paid executive in Shinsegae Group. In 2023, he received ₩4.15 billion (approx. $3.19 million) in total compensation from both Shinsegae International and Shinsegae’s Digital & Global division — surpassing Chairwoman Chung Yoo-kyung’s ₩3.6 billion (approx. $2.77 million) pay from Shinsegae.
This underscores the high level of expectations placed on Kim by the group.
However, Shinsegae International’s performance has sharply declined under his leadership. After achieving a record ₩115.3 billion (approx. $88.7 million) in operating profit in 2022, the company saw a 57.7% drop to ₩48.7 billion (approx. $37.5 million) in 2023, and the downtrend continues.
Some argue that the poor results reflect broader market challenges and the difficulty of overseeing both fashion and beauty simultaneously, making it hard for Kim to fully demonstrate his capabilities.
But this year, things are different. Kim is now solely responsible for fashion — his specialty — and failure to produce a turnaround may mean no further opportunities. His term runs until March 2026.
Most analysts agree that a swift rebound is unlikely. Jung Ji-yoon said, “While we anticipate a recovery in profits from cost-cutting and base effects starting in late 2025, with company-wide operating margins around 3%, meaningful improvement in profitability will take time.”
Amid industry headwinds, William Kim appears focused on laying a foundation for profitability through cost control, aiming to capitalize on a rebound in the domestic apparel market.
At the March shareholders’ meeting, Kim stated, “To overcome the current crisis and achieve sustainable growth, we’re prioritizing a group-wide business restructuring. We are reviewing and restructuring all costs from zero base, with the goal of building a long-term, stable financial structure that enables consistent profitability.”
Reported by Heo Won-seok
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- Lotte’s Job-based Pay Push Faces Harsh Reality — Shin Dong-bin’s Optimism Meets Tough Road Ahead
- Lotte Group Chairman Shin Dong-bin’s efforts to implement a job-based pay system aimed at improving the group’s “work culture” face numerous challenges.
Most notably, the criteria for distinguishing between “critical” and “non-critical” roles are not resonating with employees, prompting criticism that job-based pay does not suit South Korea’s organizational culture.
According to accounts from inside and outside the group on April 23, Lotte is pushing to expand job-based pay — where compensation is determined by the responsibilities of a given role — across its affiliates. However, employee dissatisfaction appears to be growing.
An employee from one affiliate said, “There were rumors about the job-based system, and it turns out they were true. Among people who joined the company at the same time, many are grumbling about the plan.”
Another employee commented, “It’s hard to understand what basis the company is using to classify jobs as important or not. Salaries at Lotte are already lower than at other conglomerates, and this is hurting morale even further.”
A job-based pay system determines salaries based on the significance and demands of the work performed, aiming to align pay more closely with actual job responsibilities.
A representative from Lotte Holdings explained, “We’re trying to build an HR system that focuses more on individual performance based on job roles, with the aim of improving efficiency and productivity.”
Currently, Lotte Department Store and Lotte Wellfood have been directed to review the introduction of job-based pay. Affiliates such as Lotte Biologics, Lotte Innovate, and Daehong Communications have already implemented it, and Lotte plans to expand the system across its affiliates.
This is the first such attempt among major South Korean conglomerates. Samsung Electronics attempted to introduce job-based pay in 2016 but abandoned the plan after strong employee backlash.
Chairman Shin appears to believe that such a drastic HR reform is necessary despite the expected pushback from employees, likely seeing limitations in the seniority-based pay system amid the group’s broader crisis.
He may view job-based compensation as essential to reforming the rigid, seniority-driven corporate culture, by aligning pay with the actual value of work performed.
Yet employees remain more wary than hopeful. A key concern is the perceived arbitrariness in defining what constitutes “important” work.
An employee at one affiliate said, “After hearing about the job-based system, people have been gathering to speculate about how their roles will be ranked, and complaints are growing. Even if jobs differ in importance, ranking departments could lead to more comparison and dissatisfaction.”
For example, in the retail sector, debates could arise about whether MDs (merchandisers) or marketing teams are more critical. Even if the company applies its own standards, it may not gain employee support.
In both academic and labor circles, the success or failure of job-based pay systems hinges on how effectively jobs are analyzed and relatively valued. Gaining consensus on which tasks are essential and which are supportive is critical.
Another employee noted, “In affiliates that lean technical, such as those with R&D roles, it’s easier to agree that research jobs should be rated highest. But in affiliates with more varied roles, like marketing or admin, grading jobs could trigger more dissatisfaction.”
To mitigate this, Lotte is reportedly considering not disclosing each employee’s job grade. In fact, affiliates that have already implemented the system do not reveal individual rankings.
Even if consensus is reached on how to grade jobs, another hurdle remains: determining compensation based on those evaluations, especially given the lack of relevant market data.
The system should be grounded in difficulty level and market competitiveness, but few South Korean firms outside the public sector have adopted it.
Critics also argue that job-based pay may not mesh well with Korea’s team-centered corporate culture, where roles are often flexible and employees are expected to help across functions when needed.
Job-based pay systems are designed for clear individual responsibilities, but Korean corporate dynamics often demand group decision-making and cross-functional support, creating a mismatch.
There are also questions about the actual effectiveness of such systems. Some financial institutions that have adopted job-based pay systems have faced criticism for being “job-based in name only.” According to a financial industry insider, the salary difference between job roles is only around 50,000 to 100,000 KRW (approx. 38 to 77 USD), which makes it difficult for employees to feel any real impact and instead breeds resentment among colleagues.
Lotte is said to be considering a pay gap of about 20% between grade 1 and grade 5 as part of its plan.
That said, the system isn’t entirely without merit. In companies where job-based pay has been implemented, roles once avoided due to high workload but low reward have attracted talent after being designated “core roles.”
Some firms allow employees in core roles to reach promotion thresholds faster, leading to greater voluntary participation and motivation.
Reported by Nam Hee-heon
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- Samsung Electronics’ Han Jin-man Faces Dilemma Over U.S. Foundry Strategy: “Tariffs If Idle, Losses If Operated”
- Samsung Electronics is facing a dilemma over its semiconductor foundry (contract manufacturing) plant under construction in Taylor, Texas.
With no major customers secured, experts warn that launching operations as scheduled in 2026 may be akin to "pouring water into a bottomless pot."
However, not producing semiconductors in the U.S. could leave the company vulnerable to heavy tariff policies under a potential Trump administration, making it difficult to scale back the investment.
According to reports compiled from the semiconductor industry on April 23, Samsung Electronics’ foundry division may post operating losses of more than 5 trillion KRW this year. Amid these concerns, there is growing analysis that the start of operations at the Taylor foundry plant may need to be delayed.
Samsung Electronics is investing $37 billion (about 53 trillion KRW) to build two semiconductor manufacturing plants and an R&D facility in Taylor, Texas. The Taylor plant is expected to produce advanced semiconductors using 2–4nm process technology and is slated for completion in 2026.
However, it is reported that Samsung has recently delayed orders for major semiconductor equipment and is adjusting its investment pace.
This is due to difficulties in securing large clients.
Samsung is competing with Taiwan’s TSMC to secure 2nm customers, but so far has not announced any major client wins. In contrast, TSMC has reportedly secured Apple, Intel, and AMD as customers for its 2nm process.
If Samsung fails to secure enough orders, the utilization rate of the Taylor plant is expected to remain low even after completion.
Even if large orders are received, operating at a loss appears inevitable for the time being.
TSMC's plant in Arizona, completed last year and supplied with large orders from major U.S. tech companies, still recorded a net loss of 14.208 billion TWD (about 630 billion KRW) in 2024.
China’s state-run Global Times reported that “the Arizona plant imports key parts and raw materials, which increases logistics costs and lengthens supply cycles,” adding, “it’s no secret that the decision to build semiconductor manufacturing facilities in the U.S. was driven not by commercial logic, but by geopolitical pressure under the CHIPS Act.”
TSMC founder Morris Chang predicted in 2022 that "manufacturing semiconductors in the U.S. will cost 50% more than in Taiwan."
Since Samsung’s Taylor plant has not secured any large orders yet, its situation could be more serious than TSMC’s.
The financial burden on the foundry business unit is growing.
Samsung Electronics’ foundry and System LSI divisions recorded an operating loss of around 5.18 trillion KRW in 2024. This year alone, losses of over 5 trillion KRW are expected from the foundry division.
Moreover, production of the Exynos 2500 mobile application processor (AP) using 3nm process technology remains uncertain, making it even more necessary to minimize losses.
Han Jin-man, President of the Foundry Business at Samsung’s Device Solutions (DS) Division, said during a shareholders' meeting on March 19, “We will work to continuously grow sales at each process node and decisively reduce inefficient investments.”
However, simply reducing U.S. investments is also not a straightforward option.
Most of the facilities at the Taylor plant have already been built, and only some manufacturing equipment remains to be installed. Additionally, there is still a need to produce some semiconductors in the U.S. to avoid tariffs.
On April 3 (local time), former U.S. President Donald Trump stated that “tariffs will soon be imposed on semiconductors,” and in February, he mentioned tariffs at a level of 25%.
Given U.S. tariff policies and TSMC’s operations in the U.S., Samsung Electronics is essentially forced to continue investing in the U.S., despite unfavorable conditions.
An industry insider commented, “TSMC completed its U.S. plant with large orders in hand, while Samsung is nearing completion without any major contracts. While the investment decision has strong political underpinnings, with predictable losses ahead, Samsung needs to revise its plans to minimize the damage.”
Reported by Na Byung-hyun
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- Why Cho Hyun-bum Turned to Lee Soo-il — Again, for Hanon Systems
- Lee Soo-il, Vice Chairman of Hankook & Company Group and CEO of Hanon Systems, is considered a trusted confidant of Cho Hyun-bum, Chairman and CEO of Hankook & Company Group.
Chairman Cho dispatched Vice Chairman Lee to Hanon Systems with the intention of making the company’s acquisition a crucial turning point in Hankook & Company Group’s transformation into a comprehensive mobility corporation.
This is similar to how LG Group Chairman Koo Kwang-mo appointed former LG CEO Kwon Young-soo as Vice Chairman of LG Energy Solution to strengthen its battery business.
Vice Chairman Lee is overseeing the integration process after the acquisition to ensure that Hanon Systems is stably embedded within the group, while also taking a comprehensive view of Hankook & Company Group.
◆ Background of the Acquisition by Hankook & Company
Hanon Systems is a global No. 2 in automotive thermal management systems and is experiencing a surge in demand due to the growth of eco-friendly vehicles such as electric cars.
Through its acquisition of Hanon Systems via Hankook Tire & Technology, Hankook & Company Group has completed its portfolio in tires, vehicle auxiliary batteries, and thermal management systems, further solidifying its status as a global leader.
Approximately KRW 1.44 trillion was invested in the process, giving the group a 54.77% stake.
In the automotive industry, this is interpreted as a strategy to maximize synergy effects.
Moreover, the European Union is expected to tighten its carbon neutrality-related emission regulations. This is likely to revitalize sales of eco-friendly vehicles, including electric cars, which have been facing a temporary stagnation phase (referred to as a “chasm”).
Lee Jae-il, a researcher at Eugene Investment & Securities, stated, “The EU recently announced measures to stimulate electric vehicle demand and strengthen its internal supply chain, demonstrating its commitment to overcoming the EV chasm head-on. This creates a favorable environment for Hanon Systems, now under Hankook & Company Group.”
BNK Investment & Securities researcher Lee Sang-hyun also commented, “Major European automakers like Mercedes-Benz, BMW, and Volkswagen are expected to launch new electric vehicles using newly developed electrification platforms this year, which will increase output and likely benefit Hanon Systems.”
◆ Lee Soo-il, a Traditional ‘Hankook Tire Man,’ Trusted by Cho Hyun-bum
Vice Chairman Lee joined Hankook Tire (the former name of Hankook Tire & Technology) in 1987 through open recruitment and has been a quintessential “Hankook Tire man,” spending 21 of his 37 years at the company as an executive. He has served in key roles including head of the Americas and China regional headquarters, marketing division, and operations division.
Notably, after becoming CEO and COO of Hankook Tire in 2018, he pushed for expanded sales and partnerships in the global market.
His broad industrial experience and deep understanding of overseas markets have greatly contributed to forming business strategies following the Hanon Systems acquisition.
Hankook & Company explained its decision to appoint Lee Soo-il as the new CEO of Hanon Systems by stating, “He is the right person to ensure Hanon Systems’ stable integration into the group amid an uncertain domestic and international environment, and to improve its financial structure while generating synergy. He is deemed well-suited to reinforce internal stability as the group acquires the world’s No. 2 in vehicle thermal management.”
Lee intends to create a new ecosystem that integrates tires, batteries, and thermal management systems, with a focus on synergy.
In his inauguration speech, he said, “I will do my best to improve the management efficiency of Hanon Systems and enhance its global competitiveness. Let’s grow into the world’s No. 1 HVAC system company with a proactive and challenging mindset.”
Lee has been recognized as a reliable figure for continuing to manage the company stably despite the two legal crises faced by Chairman Cho Hyun-bum.
When Chairman Cho stepped down from his CEO position in 2019 due to a personal corruption charge, Lee took over as CEO of Hankook Tire & Technology.
Even in 2023, when Chairman Cho was detained on suspicion of using tens of billions of won in company funds to renovate his house and purchase luxury vehicles, Lee continued to lead the group.
In particular, he was promoted to vice chairman after successfully overcoming the challenges caused by a fire at a Hankook Tire factory and delivering near-record-breaking performance.
◆ Can Lee Soo-il Resolve the Uncertainties at Hanon Systems?
Vice Chairman Lee is regarded as the right person to resolve potential uncertainties following the acquisition of Hanon Systems.
There are concerns that Hanon Systems’ high debt ratio might financially burden the entire Hankook & Company Group.
According to the electronic disclosure system, Hanon Systems’ debt ratio has decreased from 283% in 2022 to 268% in 2023 and 254% in 2024, but remains at a high level.
Lee is known not only as a veteran in marketing and sales but also as an expert in cost management, leading to expectations that he will be able to navigate the financial challenges effectively.
His past achievements in reducing logistics costs and operating various global business sites support this view.
Notably, during his tenure as head of the China regional office, he stabilized demand for premium tires in the Chinese market and increased the number of original equipment (OE) automotive clients from around 40 to 50—key accomplishments to his credit.
