Lotte Group Chairman Shin Dong-bin is planning to visit Vietnam next week, the first country he will visit after being granted a special amnesty by the Korean government on August 15. According to KoreanTimes, this trip clearly shows how serious the fifth largest Korean business group is in Vietnam, especially as it nears completion of its withdrawal from China.

Lotte Group Chairman Shin Dong-bin is planning to visit Vietnam next week.Reuters photo.

Previously, several Lotte executives, including Lotte Shopping CEO Kim Sang-hyun, Lotte Department Store CEO Jung Jun-ho, and Lotte Mart CEO Kang Sung-hyun, have visit Vietnam to check out their business activities here.

Lotte’s strategic redirect

In fact, Lotte has almost completely pulled out of China, which was once one of its most important markets after South Korea and Japan. Last month, Lotte Shopping held a board meeting to close the sale of its Chengdu branch. Once that department store goes on sale, Lotte will have nothing left in China after 14 years of entering.

Lotte Shopping has closed its last branch in Chengdu.

Lotte Shopping entered the Chinese market in 2008, opening 5 department stores and 199 discount stores. However, after South Korea decided to deploy the US THAAD ballistic missile defense system in 2017, China began economic retaliation against South Korean companies there. Lotte Mart closed all of its stores in China in 2018, and Lotte Department Store will also take the same step after closing its Chengdu branch this year.

When it closed in China, Lotte was targeting two markets, Vietnam and Indonesia, but Vietnam is more appreciated thanks to its strong growth in the retail business and still has plenty of room for growth. . Besides, Korean businesses are doing a lot of business in Vietnam and this will help Lotte’s activities here.

Is it easy for Lotte?

According to a Lotte Shopping official, Vietnam is considered the third most important market of Lotte Group after Korea and Japan. The company currently operates 270 Lotteria restaurants and 15 Lotte Mart stores there. Lotteria is a burger chain operated by Lotte GRS and Lotte Mart is a large hypermarket store owned by Lotte Shopping.

The group is shifting its strategy to Vietnam.

In addition, other member companies of Lotte Group are also building large-scale shopping complexes and apartments in Hanoi and Ho Chi Minh City. Lotte Group also plans to build a large complex called Eco Smart City, 1.5 times larger than the COEX convention and exhibition center in Samseong-dong, Gangnam District, Seoul. In Hanoi, the company will complete the construction of Lotte Mall Hanoi in 2023.

And yet, Lotte also established an overseas consortium, Lotte Ventures Vietnam, last year to support and develop Korean startups in Vietnam. This is the first foreign venture capital company allowed to do business by the Vietnamese government.

Looking at Lotte’s portfolio of business activities in Vietnam, it can be seen that the group owns strategic business segments and promotes most of their strengths, from retail to hypermarket. and real estate and investment and financial funds.

But, in the context of Vietnam’s retail market at the moment, there is fierce competition and competition from many businesses, from local players like Masan (who owns supermarkets WinMart, WinMart +), TGDD (Bach Hoa Xanh) or Saigon Co.op, along with foreign “giants” such as Central Group, AEON, Circle K…, are constantly having recent business expansion strategies.

Maybe, Lotte will not be easy in developing and expanding the market in Vietnam without reasonable business strategies, despite having set goals and ambitions.

Source: CafeF