Major Korean retailers are putting "information security management" at the top of their agendas as customer data breaches emerge as a critical risk that can determine a company's survival. After Coupang (CPNG) was hit with a record-high fine over a personal data breach and suffered damage to its corporate credibility, the retail industry as a whole is accelerating investment in information security and strengthening its response systems.
According to retail industry sources on the 9th, Lotte Shopping (023530.KS) selected "information security management" as one of this year's top three material issues in its recently published sustainability report, alongside "climate change response" and "customer-centered quality management." This marks the first time information security management has been included among its material issues, effectively elevating personal data protection to a core management priority.
E-mart (139480.KS) also officially specified a "breach incident and personal data leak response" manual in this year's sustainability report, which did not exist previously. The company established a company-wide division of roles to prepare for breach incidents and personal data leaks, and clearly defined the executing parties and decision-making authority at each stage of an incident, the scope of collaboration, and information-sharing procedures. The plan is designed to activate an immediate response system when an incident occurs, minimizing the spread of damage.
Hyundai Department Store (069960.KS) also decided to increase information security investment over the medium to long term. As of 2024, Hyundai Department Store had set a target of 7% for the share of its information security investment budget relative to its total information technology (IT) budget through the 2030s, but raised that target to 10% in its recently released sustainability report. The company also plans to upgrade and stably operate its "Personal Information Protection Center," which it established in October 2024 as the first of its kind in the retail industry.
The retail industry is making these moves in the view that personal data breaches have emerged as a core risk threatening overall corporate management. Once an incident occurs, costs such as fines grow larger, and additional burdens arise if disputes or lawsuits follow. There are also concerns about long-term revenue declines from damaged customer trust and a deteriorating corporate reputation. In fact, Coupang, the No. 1 player in the e-commerce industry, swung to a loss with an operating loss of 354.5 billion won in the first quarter, and last month was fined in the 620 billion won range—equivalent to a full year's operating profit.
In line with this trend, the retail industry is making bold investments in information security. According to the Korea Internet & Security Agency (KISA), E-mart's information security investment reached 8 billion won last year, up 2 billion won from a year earlier. Hyundai Department Store also expanded its information security investment from 2.6 billion won to 3 billion won over the same period. It increased its dedicated information security personnel from 13 to 13.9.
"With the recent string of personal data breach incidents, information security has established itself as a core competitive edge that determines customer trust, going beyond corporate social responsibility," a retail industry official said. "That is why the retail industry continues to expand investment in security infrastructure and information protection systems to meet society's demands for personal data protection and customers' heightened expectations."
