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Residents thwart Shinsegae plan

Sept 21,2018
Shinsegae Group’s grand plan to build a state-of-art “online center” in Hanam, Gyeonggi’s Misa District fell apart this week due to fierce opposition from local residents.

The Hanam city government sent an official statement to the Korea Land & Housing Corporation (LH) on Wednesday night saying that it opposed Shinsegae’s plan to build an online center in Misa District and that it will cooperate with the company to help find another site inside the city.

In March, Shinsegae Vice Chairman Chung Yong-jin announced plans to build a massive hub for the retail conglomerate’s e-commerce business. The company received more than 1 trillion won ($892.5 million) from foreign equity funds in January to establish an affiliate specializing in e-commerce.

The site in Misa District was to be a core facility for the future affiliate, with state-of-art facilities, an R&D workforce and a logistics center. Shinsegae was close to signing a contract to purchase 21,000 square meters of land in Misa District from LH in March.

The deal was postponed at the last minute due to fierce opposition from Misa residents, who raised concerns that the large trucks traveling to the center would disrupt the roads and pollute the air in the neighborhood.

The Hanam government has been firm that it cannot approve an acquisition that residents are fiercely up against.

“Attracting a major company and making this city self-sufficient is a task we have to accomplish, but the deal has to be welcomed by our citizens” said Hanam Mayor Kim Sang-ho.

The regional government said it made many efforts to mediate between residents and Shinsegae, but they failed to find common ground. It added that a major question was whether the retail giant would make the Misa building Shinsegae’s headquarters for its online business.

“We confirmed that Shinsegae intends to place a part of its e-commerce operation here, but not the entire headquarters, as the land [they intended to purchase] is too small to hold all of it,” the city said in a statement. It added this was why the city government concluded that Shinsegae’s online hub wouldn’t be much of an advantage to the community.

Shinsegae Group said that no decision had been made on whether the Hanam site would have housed the e-commerce headquarters. The retail conglomerate added that the postponed establishment of an online center will not interrupt its plans to launch its e-commerce affiliate.

“The online center and the e-commerce affiliate are separate cases,” a Shinsegae spokesman said. “We plan to establish the affiliate later this year or early next year.”


BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]