Conglomerate offspring compete in rising bakery cafe sector

The bakery cafe Ozen opened on the first floor of Hyundai Motor headquarters in Yangjae-dong, Seoul in July, replacing a cafe called Blue Monte. The change has significant implications, however.

Ozen is run by Haevichi Hotel & Resort, whose executives are the daughters of Hyundai Motor Group Chairman Chung Mong-koo -- Sung-yi, Myung-yi and Yun-yi. The first branch was opened at Haevich Hotel & Resort Jeju and the second is in Hyundai Motor headquarters in Yangjae-dong.

The third store will be opened at the sales headquarters of Kia Motors in the Apgujeong-dong neighborhood of Seoul.

Experts say female executives of the motor group, who had stayed relatively quiet compared to their peers, have begun a bakery cafe business. The group chairman`s daughters are said to be like their mother, Lee Jeong-hwa. Lee was the eldest woman in the Hyundai family and known for her silent support for her husband.

The Korean business circle sees that though her three daughters have not been notable, they will make a change with the start of Ozen.

Bakery cafe is a business in which conglomerate owner families, ladies in particular, show great interest. Chung Yoo-kyung, vice president of Shinsegae and the daughter of Shinsegae Group Chairwoman Lee Myung-hee, has stakes in the Chosun Hotel Bakery with the brands of Dalloyau and Vecchia & Nuovo.

Lee Bu-jin, the president of Hotel Shilla and eldest daughter of Samsung Electronics Chairman Lee Kun-hee, has a subsidiary operating Artisee, a bakery that sells bread and coffee. More recently, Bliss Chairwoman Chang Sun-yoon, a relative of the Lotte Group owner, also launched a high-end bakery cafe.

The three Chung sisters are expected to heat up the competition in the bakery cafe sector.

Just as Dalloyau represents luxurious French baked goods and Artisee takes a high-end strategy with interior design by a famous Japanese designer, Ozen is also expected to use an upscale strategy.

The Chung sisters have been aggressively involved in the management of Haevich since their mother, who also served as the representative director of the hotel, died in 2009. Chung Myung-yi is known for her affection for the hotel business as seen by her selection of decorations and furniture in the hotel.

In the second half of last year, they began to compete against their Samsung counterpart Lee Bu-jin. Haevich Jeju opened the luxury spa "Spa Ara" in June last year with a service combining organic diet and traditional massage. It also launched a test drive program for the Kia high-end sedan K5 to great success.

In response, Lee Bu-jin made a private beach and conducted aggressive marketing and promotions to attract customers, such as night swimming.

"Ozen is now increasing the number of stores with its popularity spreading through a word of mouth," a Haevich source said. "As the food service business is related to the hotel business, executives put huge focus on it."

sun10@donga.com