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South Korean retailer, Shinsegae, has signed a funding agreement to invest over KRW1 tn (US$938m) to help build a new ecommerce business.
With funding from BRV Capital and Affinity Equity Partners, the online units of Shinsegae and E-Mart will spin off and establish a separate affiliate, dedicated to the Group's ecommerce business. Choi Woo-jung, head of the group’s ecommerce business said, 'Our goal is to launch the new affiliate within this year [...]'.
The rising number of single and two-person households, widespread high-speed internet access and increasing consumer confidence in making online payments, are key growth drivers of South Korea's online channel. Online is also by far, the fastest growing channel in the country. Having announced last year that it was planning to either invest in its existing ecommerce business or acquire another platform, Shinsegae's latest announcement comes as no major surprise.
The new affiliate business, which has yet to be named, will bolster the retailer's focus on driving profitability through online sales. It will also look to carry out other business projects, with the aim to reach KRW10 tn annual revenue by 2023.
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