CJ GROUP, the South Korean company responsible for spreading much of K-Pop’s popularity abroad, said it’s considering acquiring entertainment and food assets in the US as part of the conglomerate’s plans to triple its revenue by the end of the decade.
“We are aggressively investing in the US, where our growth potential is huge,” CJ America co-chief executive officer Suh Sung-yup said in a phone interview, though he declined to name potential acquisition targets. “We will accelerate our growth not only by expanding existing business, but also by fostering new sectors.”
The comments underscore CJ’s renewed ambitions for growth after Chairman Lee Jay-hyun returned from jail last year after being convicted of tax evasion and embezzlement in 2014. The family-run conglomerate, which traces its roots to the founder of Samsung Group, in May announced plans to raise its global revenue to 100 trillion won ($88 billion) from about 30 trillion won last year.
Though CJ ranks first in South Korea in food and entertainment, its prominence is less pronounced in western markets. North America is currently CJ’s fourth-largest overseas market – after China, Vietnam, South East Asia – but US revenue has been growing at an annual pace of 35% during the past five years and that momentum is likely to persist as CJ begins sales of its cosmetics through Nordstom, Inc.’s online mall soon and pushes its Bibigo-branded foods, Suh said.
“America may become the second-largest market or at least the third biggest market for our group in the next few years,” he said. CJ America is expecting revenue to reach about $700 million this year in the US.
In entertainment, CJ is planning to double the number of its 4DX movie screens in the Americas, Suh said. Also, KCON festival organizer CJ E&M Corp. is examining ways to turn Korean pop into a subculture in the US, he said.
Growth ambitions are prompting CJ to bolster promotional activities. Marketing expenses will increase by about 40% overseas in the next few years, chief marketing officer Kyeong Wookho said in a separate interview. For example, CJ is sponsoring the first official PGA Tour tournament in Korea, which tees off Thursday, to reach out to a billion golf fans worldwide. – Bloomberg