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| Hyundai Department Store in Apgujeong, Seoul / Courtesy of Hyundai Department Store |
By Nam Hyun-woo
Hyundai Glovis, the logistics unit of Hyundai Motor Group, may handle the logistics for Hyundai Department Store Group's new fresh food delivery service, in what appears to be a rare but necessary partnership between Hyundai owner family members.
The chiefs of the two groups are grandsons of Hyundai Group founder Chung Ju-yung, but they have been operating individually since they were separated from the Hyundai Group in the late 1990s and early 2000s. Industry officials say the partnership, if it actually happens, will have great significance as it is expected to be a case of creating synergy between the Chung family members in a growing business sector.
Reports said Sunday that Hyundai Department Store will soon contract the logistics of its new fresh food service to Hyundai Glovis, instead of its existing logistics partner CJ Logistics. More specifically, the two sides signed a third-party contract, in which Hyundai Glovis will rent a logistics center in Gimpo, Gyeonggi Province, and take control of fresh food deliveries.
Hyundai Department Store Group and Hyundai Glovis neither confirmed nor denied the reports.
Hyundai Department Store Group has department store, duty free and home shopping units among a number of others, but does not have a logistics unit. The group appears to be diversifying and expanding its logistics partnership as the importance of delivery services continues to grow in retail businesses.
The new online fresh food delivery service is scheduled to open next month and is aimed at early morning deliveries of groceries available in Hyundai Department Stores' food sections. The department store has been running a separate online food delivery service since 2018, but is facing limits because the company is delivering products directly from its outlets.
Due to this, delivery coverage has been limited to regions near the outlets and the service did not receive orders after department stores' closing hours. By having a logistics center, the group expects to address these shortcomings.
Hyundai Glovis, as a logistics firm, has its major business in transporting automobiles ― mostly for Hyundai Motor and Kia Motors. The sales from the two auto brands accounted for 63 percent of Hyundai Glovis' revenue in the first quarter.
To lower its reliance on its affiliate, Hyundai Glovis is also diversifying its logistics clients and expanding its automobile-centric portfolio. Currently, Hyundai Motor Group Executive Vice Chairman Chung Euisun holds a 23.3 percent stake in the company.
Hyundai Department Store was spun off from Hyundai Group in 1999 and Hyundai Motor followed in 2002, as an outcome of a dispute between sons of the late Hyundai Group founder Chung.
Hyundai Motor Group Chairman Chung Mong-koo and Hyundai Department Store Group Honorary Chairman Chung Mong-keun are brothers, and their chiefs ― Hyundai Motor Group Executive Vice Chairman Chung and Hyundai Department Store Group Chairman Chung Ji-sun ― are their sons.
