Lotte Mart to exit the Chi­nese mar­ket

The Myanmar Times - Weekend - - International Business -

SOUTH Korean su­per­mar­ket chain Lotte Mart, which was once pop­u­lar in China, will re­port­edly com­pletely leave the Chi­nese mar­ket by the end of the year.

Lotte Mart started op­er­a­tions in China in 2004, and set up 112 re­tail stores in 11 years, but as of now, the com­pany has sold 93 of its re­tail stores, and the re­main­ing stores that were not sold are planned to be shut­tered be­fore the end of the year.

On July 13, 2018, Lotte Shop­ping Hold­ings (Hong Kong) Co Ltd trans­ferred its 716 mil­lion yuan stake in Lotte Mart to Chi­nese su­per­mar­ket chain Wumei Hold­ings Inc for 444 mil­lion yuan and lost own­er­ship over its 21 stores in North­ern China.

Pre­vi­ously, Liqun Com­mer­cial Group from China’s east­ern Shan­dong prov­ince an­nounced that it had ac­quired Lotte Mart’s 72 stores and 15 prop­er­ties in East­ern China.

Nei­ther Wumei nor Liqun have any in­ten­tion of us­ing Lotte Mart as their trade­mark. Cui, from the pub­lic re­la­tions de­part­ment of the com­pany, ver­i­fied this in­for­ma­tion and noted that “(Lotte Mart) has ini­tially de­ter­mined that it will com­pletely with­draw from China dur­ing 2018”.

The com­pany went on record as say­ing that 74 out of its 112 stores in the coun­try were or­dered to close be­cause of fire safety vi­o­la­tions, and the 13 other out­lets set­tled on sus­pend­ing busi­ness at their own dis­cre­tion.

How­ever, ac­cord­ing to a fi­nan­cial re­port of Lotte Mart’s par­ent com­pany Lotte Shop­ping, in 2017 alone, Lotte Mart’s loss in China reached up to 268 bil­lion won ($2.37 mil­lion), and since the sec­ond half of 2016, its to­tal loss in China has shot up to nearly one tril­lion won ($880 mil­lion). This has been partly blamed on a boy­cott on Korean goods by Chi­nese shop­pers over last year’s THAAD mis­sile con­tro­versy.

When asked about Lotte Mart’s plans for the fu­ture, Cui did not give a clear re­ply. She only em­pha­sized that “the su­pe­rior re­sources will be in­te­grated and ad­justed across the globe to launch busi­ness model catered to each mar­ket”. – China Daily

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