Lotte Mart exits Beijing with sale to Wumei

Updated 2018-04-27 13:39:05

S.Korean chain 'couldn't recover' after bilateral tensions hit mainland business

South Korea-based supermarket retail chain Lotte Mart will sell 21 Beijing stores to Chinese supermarket chain Wumei Holdings Inc for 1.42 billion yuan (4 million), Lotte Mart confirmed to the Global Times on Thursday.

Among the outlets, 10 are large ones and the rest are medium-sized, a public relations (PR) representative of Lotte told the Global Times. The sale means that there will no longer be any Lotte Mart stores in Beijing.

The Lotte PR also disclosed that Lotte Mart will sell 87.38 percent of its stake in Beijing stores to Wumei.

Including the Beijing stores, Lotte Mart has 110 stores on the Chinese mainland, the company said.

The sales show that the South Korean retailer is facing reality after grappling with a tough business environment in the mainland. Lotte bore the brunt of bilateral political friction stemming from a February 2017 land-swap deal Lotte signed with the South Korean government. Under that agreement, the company provided a golf course as the site for the deployment of a US missile shield system, a move that triggered protests from China.

In the past, Lotte Mart repeatedly told the Global Times that it wouldn't abandon the mainland market.

The Seoul-based Aju Business Daily reported on April 4 that Lotte Group, the parent company of Lotte Mart, saw overseas sales revenue slump 7.8 percent on a yearly basis in 2017, mostly because of bilateral tensions between China and South Korea.

Chen Yuefeng, founder of retail news website lingshouke.cn, said that Lotte Mart was never able to recover from the impact of the missile dispute, with setbacks like large-scale store closedowns in early 2017.

"To be honest, I think domestic consumers' patriotic emotion against Lotte Mart eased a lot with the passage of time. However, Lotte Mart needs external support, especially from mainland local governments, to reinvigorate its business, but it can't get that," he said.

According to Chen, Lotte Mart had some advantages, like selling South Korean products that are very popular among Chinese consumers, a comfortable shopping environment and convenient store locations.

"Some of Lotte Mart's branches were doing quite well in the mainland market. Lotte Mart would not have sold its stores in the mainland except for the impact on its businesses that were caused by changes in the relationship between China and South Korea," Chen told the Global Times.

But Chen also said that Lotte Mart also needed to update its business in the mainland to focus more on e-commerce.

Apart from Lotte Mart, many other South Korean companies' businesses were also slumping in the mainland in recent months. For example, mobile phone brand Samsung's market share fell to just 0.8 percent in terms of shipments during the fourth quarter of 2017, compared with 7.6 percent in 2015, data from Strategy Analytics showed on April 4.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58May 21 2018 20:42:38

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16May 21 2018 20:42:38

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18May 21 2018 20:42:38

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

Most Watched

News:
China World Business Sports Showbiz Audio
Video:
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
Photos:
China World Fun Travel Entertainment Sports
Travel:
Beijing Shanghai Guangzhou
Lifestyle:
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords