The background to Chairman Jung Yong-jin’s unprecedented and hardline response to the controversy extends beyond a simple marketing to the entire group’s business strategy in Gwangju
Jung Yong-jin, chairman of Shinsegae Group.
Although the Shinsegae Group had moved to contain the situation triggered by the 'Tank Day' controversy a day earlier by abruptly dismissing Son Jeong-hyun, chief executive of Starbucks Korea (SCK Company), the controversy did not subside, prompting Group Chairman Chung Yong-jin to step in personally.
Chairman Chung Yong-jin released a public apology on May 19 regarding the controversy over Starbucks Korea’s marketing campaign conducted on the anniversary of the 'May 18 Democratization Movement,' stating, “I bow my head in apology on behalf of the group.”
In the apology, Chairman Chung stated, “We have caused deep pain to the spirits and bereaved families of the May 18 Democratization Movement, as well as to the public,” and, “This incident is an inexcusable wrongdoing that made light of the suffering and sacrifices of all those who have dedicated themselves to the democracy of this country.” He added, “I feel deeply that all responsibility for this matter lies with me,” and, “I gravely accept the fact that the entire group lacked historical awareness and sensitivity regarding the historical pain of the Republic of Korea’s community.”
Chairman Chung also directly proposed three measures to prevent a recurrence in his apology. First, he emphasized that he would transparently disclose the investigation results regarding the incident’s circumstances and approval process, and reexamine the marketing content inspection processes and deliberation procedures of all affiliates. Furthermore, he stated that education would be conducted to establish a strict historical awareness and ethical standards for all executives and employees, including himself.
Chairman Chung dismissed SCK Company CEO Sohn Jeong-hyun the previous day. He also decided to dismiss the executive in charge who planned and organized the event. The group plans to initiate disciplinary procedures against all related executives and employees. A Shinsegae Group official reported, “Chairman Chung ordered a strict and thorough internal investigation immediately upon being briefed on this matter,” and, “He took the matter very seriously and played the extreme card of dismissing the CEO.” Chairman Chung was reportedly enraged that this incident occurred specifically on the anniversary of May 18 and ordered the strongest possible disciplinary action the group could take.
The origin of the controversy arose when Starbucks Korea conducted a tumbler promotion on the previous day, the anniversary of May 18, and displayed “Tank Day” and “May 18” side by side on a promotional poster. Although it was an event selling a tumbler set named “Tank” at a discount, criticism poured in that it evoked the martial law troops and tanks deployed to Gwangju during the May 18 movement. It was also pointed out that the phrase “Thump on the desk” recalled the authorities’ false explanation during the torture and death of martyr Park Jong-cheol in 1987.
The marketing phrases conducted by Starbucks Korea on the anniversary of the 'May 18 Democratization Movement.' (Captured from the Starbucks App)
As criticism spread across online communities and social media platforms, Starbucks posted an apology on its app and website and additionally distributed an apology under CEO Sohn’s name. However, public criticism did not subside.
President Lee Jae-myung also voiced criticism. Through X (formerly Twitter), President Lee criticized, “A ‘May 18 Tank Day’ event that insults the blood-stained struggle of the victims and citizens on the historic anniversary of the Gwangju May 18 Democratization Movement,” and, “I am enraged by the inhumane and outrageous behavior of a low-quality merchant that denies the Republic of Korea’s community, basic human rights, and democratic values.” He further emphasized, “Appropriate moral, administrative, legal, and political responsibility must rightly be given.”
Analysts in the industry suggest that the background to Shinsegae Group Chairman Chung Yong-jin taking an exceptionally ultra-strong response to Starbucks Korea’s “Tank Day” controversy involves the entire group’s Gwangju business strategy and brand credibility being at stake, moving beyond a simple marketing failure.
In particular, it is interpreted that a sense of crisis came into play, as provoking local public sentiment could burden the group’s mid-to-long-term investment strategy in a situation where large-scale development competition among major retail conglomerates surrounding Gwangju Metropolitan City is going into full swing. Shinsegae signed an investment memorandum of understanding (MOU) with Gwangju City in February for the Gwangcheon Terminal complex project and fully commenced a development project worth a total of 3 trillion won ($2.30 billion).
This project aims to create a mega-complex landmark combining a department store, bus terminal, luxury hotel, performance hall, and business, residential, medical, and educational facilities on the Gwangcheon Terminal site. Through this, Shinsegae is putting forward a plan to develop Gwangju into a core base for the Honam region.
In fact, Shinsegae has put considerable effort into building regional symbolism and identity, even using the expression “The Great Gwangju” in the project name. The company also unveiled a plan to make it a new landmark in the Gwangju region by arranging content featuring the taste and culture of Jeolla Province in the underground pedestrian space and combining it with a performance hall, observatory, and cultural facilities.
Shinsegae Property announced that it will complete Grand Starfield Gwangju by 2033. [Photo provided by Gwangju City]
In addition, the “Grand Starfield Gwangju” project being promoted by Shinsegae Property is also considered a core pillar in Shinsegae Group’s Gwangju strategy.
Shinsegae Property plans to invest approximately 1.3 trillion won (approximately $872 million) in the Eodeungsan Tourist Complex to create a stay-type complex combining a shopping mall, water park, hotel and condominium, and golf course. As a large-scale project aiming to attract tourists from outside the region beyond simple shopping facilities, it is interpreted that the group level also views Gwangju as a future growth base.
In effect, Shinsegae is continuing large-scale investments in the Gwangju region by simultaneously promoting the department store development and the Starfield project. Analysts say that the occurrence of a marketing controversy connected to the anniversary of the May 18 Democratization Movement in this situation inevitably acts as a significant burden from the group’s perspective.
In particular, the fact that competitor Hyundai Department Store is also accelerating its targeting of Gwangju is cited as a burden factor for Shinsegae. Hyundai Department Store has formalized a plan to open a next-generation complex platform, “The Hyundai Gwangju,” in Gwangju Metropolitan City in 2029, jumping into the competition to preempt the local retail market.
The industry views Gwangju as emerging as a core stage for future competition in complex shopping malls and cultural content, moving beyond a simple new store opening area. This means that the impact of local public sentiment and brand image on business success or failure is bound to grow accordingly.
A retail industry official stated, “As Gwangju is a region with high sensitivity to historicity and regional identity, companies are also quite cautious in managing related messages,” and, “From Shinsegae’s perspective, this was not an issue to be ended at the level of a simple apology, but rather they likely needed to show the group’s resolve.”
Choi Mun-hee
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