Top Korean re­tailer tripped by ties to Ja­pan

The China Post - - WORLD BUSINESS - BY YOUKYUNG LEE

When South Korean Chung Yu-suk read an ar­ti­cle about re­tailer Lotte’s cho­co­late ads fea­tur­ing a Ja­panese fig­ure skat­ing star, he was so an­gered he started an online group urg­ing Kore­ans to boy­cott their coun­try’s top re­tailer.

Chung is one of a grow­ing num­ber of South Kore­ans vow­ing to pun­ish Lotte af­ter a fam­ily bat­tle for con­trol of the com­pany spilled out in public and high­lighted their deep links to Ja­pan, Korea’s for­mer col­o­nizer.

The choice of Ja­panese skater Mao Asada for the ad­ver­tise­ment that first ap­peared years ago was not sur­pris­ing since it was aimed at the Ja­panese mar­ket, where Lotte also has busi­nesses.

But in South Korea, it only re­in­forced per­cep­tions Lotte is more Ja­panese than Korean and par­tic­u­larly be­cause Asada is con­sid­ered the chief ri­val of the South’s beloved Kim Yuna, an Olympic gold medal­ist.

“I don’t un­der­stand how Lotte Ja­pan picked her know­ing that she would com­pete with Kim Yuna,” said Chung, a self-em­ployed 45-yearold who lives in Daegu city in the coun­try’s south­east.

The bat­tle for con­trol of Lotte pits the fam­ily’s youngest scion against its ag­ing pa­tri­arch and his old­est son. As the broth­ers ap­peared in public to blame each other for the in­creas­ingly ugly power strug­gle, South Kore­ans were re­minded of two facts they found un­palat­able: Nei­ther of the men who both claim they are South Korean speaks Korean flu­ently and the hold­ing com­pany of Lotte is based in Ja­pan with Ja­panese share­hold­ers.

It’s un­clear how dam­ag­ing the boy­cott call will be for Lotte in South Korea, where the com­pany earns most of its prof­its. But the anti-Lotte ac­tivists have cho­sen an opportune mo­ment to ig­nite sen­ti­ment against the com­pany.

South Korea will mark the 70th an­niver­sary of in­de­pen­dence from Ja­pan’s colo­nial rule on Satur­day, a mo­ment of na­tional re­flec­tion that comes dur­ing a pe­riod of par­tic­u­larly strained ties be­tween the East Asian neigh­bors. South Korea’s gov­ern­ment says Ja­pan has failed to atone for forced la­bor, forced pros­ti­tu­tion and other bru­tal­i­ties dur­ing its colo­nial rule.

Na­tional flags are on dis­play on streets and on build­ings. A movie about Korean in­de­pen­dence fight­ers in the 1930s at­tempt­ing to as­sas­si­nate a Ja­panese mil­i­tary com­man­der and a pro-Ja­panese busi­ness­man is a box of­fice hit. With over 9 mil­lion tick­ets sold, “As­sas­si­na­tion” is set to be­come the most pop­u­lar Korean movie this year. On Wed­nes­day, an 80-year-old man set him­self on fire dur­ing an anti-Ja­pan rally in front of the Ja­panese Em­bassy in Seoul.

Lotte was founded in 1948 as a post-war chew­ing gum maker in Ja­pan by Shin Kyuk-ho, 92, who moved to Ja­pan when Korean Penin­sula was un­der Ja­pan’s colo­nial rule. He mar­ried a Ja­panese woman and they had two sons in Ja­pan, who are now bat­tling over the busi­ness em­pire.

Shin started his busi­ness in South Korea in 1967, and it grew into one of the coun­try’s big­gest con­glom­er­ates be­hind the likes of Sam­sung and Hyundai.

It is dif­fi­cult to avoid Lotte liv­ing in South Korea where the largest re­tail­ers are Lotte su­per­mar­kets and depart­ment stores. At these Lotte stores, South Kore­ans can buy liquor, snacks and gum Lotte swip­ing a Lotte credit card. Mul­ti­tudes of Kore­ans live in high-rises built by Lotte and watch movies at Lotte cine­mas.

The com­pany is con­cerned enough by the boy­cott calls for its chair­man Shin Dong-bin, who is the younger son of founder Shin Kyuk-ho, to hold a news con­fer­ence in South Korea on Tues­day at which he de­clared Lotte be­longs to “our coun­try.”

Public opin­ion turned sharply against the com­pany af­ter tele­vi­sion ap­pear­ances by the bat­tling sons.

Korean with Ja­panese Ac­cent

Mocked

Last month, the older son spoke in Ja­panese in an in­ter­view with a South Korean tele­vi­sion net­work to make his case for head­ing the com­pany. When his younger brother later spoke to the press in Korean, his heavy Ja­panese ac­cent and awk­ward word choices be­tray­ing un­fa­mil­iar­ity with Korean id­iom be­came a sub­ject of mock­ery.

“If Korean peo­ple want to do busi­ness in Korea, they should speak Korean. It’s ridicu­lous they speak in Ja­panese and can’t even speak Korean prop­erly,” said Kim Ji-kwan, a 34-year-old in Ul­san.

Some formed their opin­ion based on the photo of Asada, the Ja­panese skater, smil­ing in a jacket with Lotte logo.

“Spon­sor­ing Asada con­firms Lotte’s iden­tity so I de­cided not to buy Lotte prod­ucts,” said 49-year-old Kim Wook. “Lotte made an ir­re­versible mis­take.”

As sen­ti­ment to­ward Lotte de­te­ri­o­rated, a con­sumer ac­tivist group and a fed­er­a­tion of small busi­nesses launched a cam­paign to boy­cott the com­pany. The groups say they are not mo­ti­vated by anti-Ja­panese feel­ings but saw a chance to pub­li­cize how mom-and-pop stores have been hurt by Lotte’s gi­ant re­tail chains.

Last week, Lotte erected a huge South Korean flag atop Lotte World Tower, a 123-story build­ing un­der con­struc­tion that would be the world’s sixth tallest build­ing once com­pleted.

Shin Dong-bin also pledged to make the com­pany’s own­er­ship struc­ture trans­par­ent and to list shares of Ho­tel Lotte, a move that will help re­duce the por­tion of Ja­panese in­vestors.

Lotte faced crit­i­cism that its Ja­panese in­vestors took ex­ces­sive profit from the South Korean busi­nesses. Shin said the div­i­dends they took ac­counted for just 1 per­cent of Lotte’s an­nual op­er­at­ing profit last year.

Yet some re­main unswayed.

AP

In this Tues­day, Aug. 11 file photo, Lotte group Chair­man Shin Dong-bin bows af­ter he is­sued a public apol­ogy at Lotte Ho­tel in Seoul, South Korea.

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