Chung Yong jin has spent years trying to give South Korean consumers more reasons to leave their homes and spend time inside Shinsegae Group’s stores, malls and entertainment properties. Now the chairman of one of South Korea’s biggest retail groups is turning to Hollywood for help.
Shinsegae is investing $1 billion in the acquisition of Warner Bros. Discovery by Paramount Skydance, putting Chung behind a collection of American entertainment properties that includes Harry Potter, Game of Thrones, Top Gun, Mission Impossible and Star Trek. Shinsegae Property, the group’s real estate development arm, is making the investment through a stake in the investment vehicle involved in the transaction.
The bet matters beyond South Korea because it offers a glimpse of how some of Hollywood’s most valuable franchises could be monetized after one of the industry’s biggest combinations. Warner Bros. and Paramount content can generate money from movies and streaming, but Chung sees another business in those characters and stories. He wants to put them inside shopping malls, theme parks, restaurants, merchandise businesses and potentially even Shinsegae’s membership programs.
That makes the investment less of a departure from retail than it might first appear.
Chung has been pushing Shinsegae to make its physical properties destinations rather than simply places to buy products. The group owns businesses ranging from department stores and supermarkets to Starfield, a chain of large shopping and leisure complexes designed to keep visitors on the property for longer periods.
His strategy increasingly revolves around competing for consumers’ time.
That thinking is visible in Starfield Cheongna, a project that combines a shopping complex with a domed baseball stadium, as well as in Shinsegae’s efforts to add entertainment, restaurants and cultural experiences to its retail properties. Earlier this year, Chung called for a shift away from waiting for customers to visit stores and toward making Shinsegae part of their everyday lives.
Hollywood gives him another tool to pursue that strategy.
The clearest example is Starbay City, a theme park and commercial development Shinsegae Property is building in Hwaseong, south of Seoul. The project was originally planned around Paramount intellectual property. Shinsegae now expects its relationship with the newly combined entertainment company to open the door to Warner Bros. properties as well.
That could put Top Gun and Mission Impossible alongside Harry Potter and Game of Thrones in attractions, performances, restaurants and merchandise businesses.
Shinsegae wants to carry the same formula into its existing Starfield malls. Popular movies and television series could be turned into temporary stores, exhibitions and interactive attractions designed to increase foot traffic and keep visitors inside the properties longer.
Chung is also looking beyond physical real estate.
The group is considering linking HBO Max and Paramount+ with membership programs across Shinsegae affiliates. A customer could eventually receive entertainment subscriptions alongside shopping discounts and loyalty rewards, allowing Shinsegae to connect spending across retail, digital services and entertainment.
The strategy reflects a larger challenge facing traditional retailers. Online shopping has made it difficult for physical stores to compete simply by offering more merchandise. Retail properties increasingly need experiences that cannot be delivered to a customer’s front door.
Chung is betting that Hollywood franchises can provide them.
The investment could also benefit the American entertainment company on the other side of the deal. Paramount Skydance completed its roughly $110 billion acquisition of Warner Bros. Discovery this week, creating a company spanning film studios, television networks and streaming services including Paramount+ and HBO Max. The combined company now faces the task of extracting more value from an enormous library of intellectual property while competing with Netflix, Disney, Amazon and Apple.
Shinsegae offers one possible route into that next phase. Instead of relying only on subscriptions and box office sales in Asia, American franchises can be converted into attractions, food, merchandise and retail experiences through a local company that already controls large physical destinations and customer relationships.
For Chung, the calculation runs in the opposite direction. Shinsegae already has the malls, stores and real estate. What it needs is content powerful enough to make consumers choose to spend their time there.
The group is even considering eventually expanding the partnership into joint content production, moving Shinsegae further beyond its traditional role as a retailer. Shinsegae has said the $1 billion investment is intended to create a new growth engine by combining its retail infrastructure with Paramount and Warner Bros. intellectual property.
Chung’s wager is therefore not simply that Hollywood will produce another hit movie.
It is that the same franchises Americans watch on screens can be turned into an entirely different business when they reach Asia, and that they can help transform Shinsegae from a company that sells products into one that sells consumers reasons to stay.
