Lotte Mart to exit the Chinese market
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