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British sportswear retailer JD Sports pushes to make S. Korea an outpost for Asian expansion

All Headlines 09:00 April 15, 2018

By Choi Soo-hyang

SEOUL, April 15 (Yonhap) -- Late last week, several dozen young South Koreans braved a long outdoor wait through the night for the opening of the first store of British sportswear retailer JD Sports Fashion Plc in Seoul.

The sportswear enthusiasts -- some of them wearing jackets to brace for the night chill -- began lining up at around 5 p.m. on Wednesday outside the 330 square-meter store in the affluent southern district of Gangnam to buy limited-edition Nike shoes.

The multi-brand shoe store offers a wide range of footwear, fashionwear and limited-edition releases by dozens of global brands, such as Nike and Adidas.

Asked if it isn't tiring to spend all day and night outside, Lee Young-seok, a 20-year-old who arrived at the store at 1 a.m. on Thursday, said he would be rejuvenated once he gets his hands on the limited-edition shoes.

Company officials said 100 of those Nike shoes sold out almost immediately after the opening of the store on Friday morning.

Ahn Young-hwan, CEO of JD Sports Fashion Korea Inc., seemed intrigued by young people's enthusiasm for sportswear offered by JD Sports Fashion.

"Everything is changing, from consumers' level of spending to their lifestyle and taste," Ahn said. "Especially the young people, they want something different."

The 55-year-old, who is a pioneering figure in South Korea's shoe industry, first brought in ABC-Mart from Japan in 2002.

The multi-brand shoe store changed the way South Koreans purchase sportswear. Before ABC-Mart, South Koreans usually bought brand shoes in department stores or standalone shops.

JD Sports Fashion Korea was established in September last year in a joint venture between the British firm and South Korean retailer Shoemarker Co., which is also headed by Ahn.

"I still remember the day I first visited JD's flagship store on Oxford Street in London," he recalled during an interview with Yonhap News Agency in Seoul.

"From how they divided sections based on function -- whether it be football or basketball -- to how they communicated with consumers using digital technology were all quite a surprise to me."

In November 2016, Ahn reached out to JD. It took less than a year since then to establish the joint venture JD Sports Fashion Korea.

In this photo provided by JD Sports Fashion Korea Inc., CEO Ahn Young-hwan poses for a photo at JD Sports' first Korean store in Seoul on April 12, 2018, before an interview with Yonhap News Agency. (Yonhap)

"Later I heard JD executive chairman Peter Cowgill had visited South Korea in October 2016 and saw our premium shoes store chain Hot-T in Gangnam," he said. "So basically, we had a mutual respect by the time we met."

Ahn said the launch of JD's Korean operation "is part of the British retailer's broader move to expand its presence in the global market."

Founded in 1981, JD Sports Fashion currently has over 1,250 stores in 14 countries, but the majority of its overseas business had previously been limited to within the European market.

Last month, JD unveiled a plan to leap into North America by purchasing U.S. sportswear retailer Finish Line Inc. in a US$558 million deal.

"As for Asia, JD is considering tapping into the Japanese and Chinese markets using its South Korean business as leverage," Ahn said. "We will play a key role as an outpost in JD's expansion into Asia."

JD Sports plans to run 31 JD outlets across South Korea by the end of this year with a revenue target of 100 billion won ($94 million).

JD Sports Fashion Korea is currently working to rebrand Hot-T stores to JD.

JD said it is also preparing to embrace the rapid increase of online shopping in South Korea with a system where customers can buy from its domestic website, as well as directly from the British one.

"We can do this because we are confident that the items that will be sold here in Korea will be of no lesser value than those sold in the U.K.," the chief executive said.

The value of transactions made with computers, smartphones and tablets reached 8.2 trillion won in South Korea last year, up 19.2 percent from a year earlier, according to government data.

While he says that the country's mass footwear retail market is in a state of saturation, Ahn still sees opportunity in the upper premium market, and emphasizes the importance of market segmentation.

"The market changes and so do consumers, and the changes we are about to face from now on will be much faster and broader than we have ever experienced," he said. "After all, our duty as retailers is to provide more options for consumers. JD Korea would like to play that role."

This photo provided by JD Sports Fashion Korea Inc. shows JD's first Korean store in Seoul on April 13, 2018. (Yonhap)

scaaet@yna.co.kr
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