South Korea’s retail giant Shinsegae, led by the group’s Vice Chairman Chung Yong-jin, said Friday it has attracted more than 1 trillion won ($940 million) from a foreign investment firm and a private equity firm in an aim to strengthen its e-commerce business.

The company said it has signed a memorandum of understanding with BRV Capital Management, a consumer focused investment firm, and private equity firm Affinity Equity Partners for its new e-commerce unit. 

“The investments will lay groundwork for Shinsegae’s further growth and expansion of its online business,” said Choi Woo-jung, vice president of Shinsegae’s e-commerce division, in a statement. 

According to the company, its online business division of Shinsegae Department Store and its discount store chain operator E-mart will spin off and combine their online business units to launch a separate company this year. Shinsegae aims to create the new firm as the business group's key distribution channel with annual sales increasing fivefold to 10 trillion won by 2023. 

The new unit is set to launch this year, though its name and detailed company structure are not decided. 

Following the announcement, Shinsegae shares jumped as much as 14 percent and E-mart’s stock surged 16 percent Friday.

The Shinsegae heirs -- de facto leader of the group Chung Yong-jin and his sister Chung Yoo-kyung in charge of Shinsegae Department Stores -- have been making aggressive moves in expanding into new fields and through acquisitions and investments.

Earlier this week, Chung Yoo-kyung’s Shinsegae Department acquired local home furnishings company Casamia for 183.7 billion won, entering the country’s home furnishings market.

Through an expansion in e-commerce business, the retail heavyweight said it will focus on growing online mall infrastructure and strengthen premium concept of its online fashion mall, as more purchases are made over online and mobile platforms.

In the last year, Shinsegae’s e-commerce platforms Shinsegae Mall and E-mart Mall logged over 1 trillion won in sales each. Its e-commerce business altogether marked 32 percent growth in 2017 on-year.

Shinsegae’s e-commerce business has been posting double-digit growth since the launch of an integrated online retailer for its subsidiaries, SSG.COM, in 2014. 

According to government data, purchases made through the internet and mobile devices have continued to rise with local consumers’ active use of smartphones. 

Statistics Korea data released earlier this month showed that transactions made with smartphones and tablets reached 7.55 trillion won in November, up 21.7 percent year-on-year. The total amount of mobile transactions accounted for 62.7 percent of all online. 

By Kim Da-sol (ddd@heraldcorp.com)