South Korean conglomerate Lotte Group has shifted focus to Vietnam’s retail market after a decision to withdraw from China in 2017, following China’s retaliation against the company over the U.S. anti-missile system deployment in South Korea.
The company is looking to make Vietnam its third-largest market after Korea and Japan. Lotte Group entered Vietnam in 1998 with its fast-food business Lotteria and has since expanded to 270 locations. The firm operates 15 Lotte mart stores and two department stores in Vietnam, with more projects underway.
The firm has also been expanding businesses in other Southeast Asian nations, including Indonesia, where it invested $3.9 billion in a large-scale petrochemical plant, which is expected to start operating by 2025.
Lotte Group chairman Shin Dong-bin is expected to visit Vietnam in September for a groundbreaking ceremony in Ho Chi Minh City and to meet with top Vietnamese officials in charge of the country’s economy, The Korea Herald reported.
The groundbreaking event is for Lotte’s Eco Smart City complex development on a 68,000-square-meter site in the Thu Thiem district of Ho Chi Minh City. The complex will have 60 floors and will cost about $900 million.
This will be Shin’s first overseas trip since receiving a presidential pardon last week. He had previously been sentenced to two and a half years in prison on bribery charges.
Lotte Group faced retaliation from China’s ruling communist party for allowing one of its golf courses in South Korea to be used as a deployment site for the U.S.-built Terminal High Altitude Area Defense (THAAD) system in 2017, which Beijing criticized for being able to “spy” into its airspace.
The Chinese regime then encouraged citizens to boycott South Korean products, in addition to halting construction on South Korean projects within its borders and canceling tour groups to South Korea. Lotte Group, which entered the Chinese market in 1994, was particularly hit hard by the THAAD controversy.
Beijing imposed tougher regulations on Lotte Group’s subsidiaries in China, including Lotte Mart, Lotte Department Store, Lotte Chilsung Beverage, and Lotte Chemical.
Lotte Shopping gradually shuttered its five department stores in China after announcing withdrawal in 2018. The company’s board of directors decided last month to sell its only remaining department store in Chengdu, China, according to Koreajoongdaily.
Lotte Mart announced in 2018 that it would close down all of its 112 stores in China. The company reported a loss of about 1 trillion won ($744 million) between 2016 and 2017, attributing the losses to the Chinese boycott of Korean goods, according to local reports.
Sunny Chao and Reuters contributed to this report.