[Edaily Reporter SHIN MIN JOON ] Kim Dong-sun, the third son of the Hanwha Group and Executive President of Future Strategy at Hanwha Machinery & Service Holdings (Hanwha M&S), is set to embark on a full-fledged independent journey. Following his recent promotion to president, Kim will spearhead the future strategy of the newly established holding company, which encompasses the Life Solutions and Tech businesses. President Kim has staked his success on an ultra-high-end strategy targeting the top 1% of VVIPs.

On the 3rd, Hanwha Group officially launched Hanwha M&S, which consolidates the Tech and Life Solutions divisions. Hanwha M&S, spun off from Hanwha Corp.—the holding company of Hanwha Group—is broadly divided into the Life Solutions sector (including retail and food & beverage) and the Tech sector (including semiconductor equipment and robotics).

The Life Solutions division includes HANWHA GALLERIA, Hanwha Hotels & Resorts, and Ourhome. The Tech division consists of Hanwha Vision, Hanwha Semitek, Hanwha Momentum, and Hanwha Robotics. Hanwha M&S consists of a total of 57 companies. Based on their consolidated financial statements as of the end of last year, these companies’ combined revenue totaled approximately 6 trillion won, and total assets amounted to approximately 11.3 trillion won. Hanwha M&S is set to list on the Korea Exchange on the 25th.

President Kim will serve as Head of Future Strategy at Hanwha M&S. In exchange, he has stepped down from his position as President of Hanwha Vision. This move is seen as an indication of President Kim’s intention to oversee not only the tech sector but also the life solutions business. Kim Hyung-jo, former CEO of Hanwha Hotels & Resorts, will serve as a partner. President Kim Hyung-jo, who will serve as the inaugural CEO of Hanwha M&S, joined the Hanwha Group in 1994 and is regarded as a veteran with over 30 years of diverse hands-on experience, ranging from business strategy formulation to facility operations.

Hanwha M&S also announced a large-scale investment plan upon its launch. The company plans to invest a total of 4.7 trillion won in Hanwha M&S by 2030, including 2.1 trillion won in capital expenditures, 2 trillion won in research and development (R&D), and 600 billion won in mergers and acquisitions (M&A). Hanwha M&S has set a target of achieving annual revenue growth of approximately 30% based on synergies among its affiliates.

Since Hanwha M&S has brought together the completely distinct business areas of Life Solutions and Tech under a single holding company, its management strategy is expected to determine its future success. The core of this management strategy appears to be an “ultra-high-end” (top-quality) approach targeting the top 1% of VVIPs. This is because VVIP customers are not sensitive to economic fluctuations and exhibit high loyalty. From the perspective of President Kim, who faces the dual challenges of securing investment funds and improving the profitability of affiliate companies, the ultra-high-end strategy may be the best choice.

In fact, President Kim is completely restructuring the Life Solutions division into an ultra-high-end business portfolio. Prime examples include the reconstruction of the Galleria Luxury Hall and the development of ultra-high-end residential properties in Gangnam. The Galleria Department Store Luxury Hall, Korea’s first luxury hall, specializes in luxury goods and VIPs.

Through the reconstruction, Galleria will expand the Luxury Hall’s retail floor space from the current 8,300 pyeong to over 18,000 pyeong. Until now, the Galleria Luxury Hall has faced size limitations compared to competing stores such as the Shinsegae Co.,Ltd. Gangnam Branch and the HYUNDAIDEPARTMENTSTORECO.,LTD(069960) Apgujeong Main Store. Galleria is collaborating with the world-renowned architectural firm Heatherwick Studio to create a completely new space unlike anything seen before. The reconstruction plan passed the review of the Seoul City Architecture Committee last May.

Synergies are also expected with the 29-unit ultra-luxury residential complex set to be built on the former The Peak Dosan site near Dosan Park. The average sale price per unit for these ultra-luxury homes is approximately 22.8 billion won, and the complex is located just 1 km from the Galleria Luxury Mall. Hanwha M&S is expected to boost the competitiveness of these ultra-luxury homes by linking them with Galleria’s top-tier VIP services.

The premium resort “Anto” is also viewed as part of this ultra-high-end strategy. Last August, Hanwha Hotels & Resorts acquired “Paraspa Seoul,” located at the foot of Mount Bukhansan, and reborn it as a premium resort. Anto consists of 15 buildings with a total of 334 guest rooms. Anto operates 224 of its rooms on a strictly membership-only basis. Membership fees range up to 1 billion won, while a full-access membership (exclusive use of a room 365 days a year) costs 5 billion won.

Through the implementation of wellness programs, the creation of family-oriented spaces, and the enhancement of food and beverage services, Anto plans to raise its current occupancy rate (OCC), which stands at 66%, to 75% by next year. Anto has also set a goal to increase its membership sales rate, currently at 20%, to 60% by next year.

Hanwha M&S is expected to integrate cutting-edge technologies from the tech sector—such as AI and robots—to maximize satisfaction with its VVIP services. Through this, Hanwha M&S will be able to provide personalized services by analyzing customer patterns and accumulating various data, while simultaneously improving customer service.

A department store industry insider stated, “The future success of Hanwha M&S hinges on the extent to which CEO Kim can generate synergy between the Life Solutions division—which forms the foundation of the business—and the high-growth tech sector.”