Lotte, Shinsegae and other retailers in Korea have been shifting their focus to Southeast Asia as it has become difficult to conduct business in China amid deteriorating Korea-Sino ties.
The increasing number of middle-class consumers in Vietnam and other countries has also encouraged the retailers to establish a larger presence in the rapidly-growing region.
SEE ALSO : China and South Korea to resolve THAAD
The exodus from the Chinese mainland has been accelerating as the Chinese government shows no signs of easing economic retaliation against Korean firms and their products because of Seoul’s decision to deploy a Terminal High Altitude Area Defense (THAAD) battery here.
Of the Korean retailers, Lotte Group has engaged most actively in the Southeast Asian markets, pushing ahead with its plan to carry out multi-complex construction projects in Southeast Asia as the group’s new growth engine.
Lotte Mart, the hypermarket brand of the nation’s largest retailer, is currently operating 45 stores in Indonesia and 13 in Vietnam, industry sources said. It will also open another store in Lampung Province, Indonesia, in December 2017.
In September 2014, Lotte built the Lotte Center in Hanoi, Vietnam. The 65-story multi-complex offers the group’s various shopping and accommodation brands, including Lotte Department Store, Lotte Mart and Lotte Hotel.
Lotte is building a large-size shopping mall with a gross floor area of 200,000 square meters in Hanoi, with completion scheduled for 2020. It is also reviewing its plans to invest about 2 trillion won (US$1.74 billion) to build another 100,000-square meter multi-complex in Ho Chi Minh City.
Lotte Duty Free, the group’s duty free store affiliate, has also recently entered Vietnam. It partnered with a local retailer to establish the Phu Khanh Duty Free at the Da Nang International Airport, and the company official said it has a similar plan to open business in other major cities in Vietnam.
Shinsegae Group’s discount chain brand E-Mart is also shifting to Southeast Asian markets.
It has officially announced its exit from the Chinese market, and chose Vietnam as its new overseas growth engine. E-Mart opened its first store in the Go Bap area of Ho Chi Minh City, in December 2015, and is planning to open its second store in the city soon.
The E-Mart Go Bap store recorded 41.9 billion sales the previous year to exceed its sales target by 20 percent. Its sales performance also marked 25.8 billion won during the first half of this year, up 27.5 percent from the same period the previous year.
It signed an MOU deal with Ho Chi Minh City last year to invest $200 million in September, and an E-Mart official said it will enter Laos, Indonesia and Cambodia soon.
GS Retail, the nation’s convenience store brand is also entering Southeast Asian markets.
GS Retail, which operates the GS25 convenience store chain, has recently established a joint venture with Vietnamese SonKim Group. Taking 30 percent in shares, GS Retail plans to open its first store in Ho Chi Minh City.
GS Retail opened its first GS Supermarket in Indonesia in October 2017.
(Source: Korean Times )