South Korean conglomerate Lotte is shifting its investment focus towards Vietnam as part of its strategy to pull out of China.
Lotte Group aims to make Vietnam its third-largest market behind South Korea and Japan, making a deeper penetration into the Southeast Asian market.
As reported by the newswire the Korea Herald, Shin Dong-bin, chairman of Lotte Group plans to travel to Vietnam in September for a groundbreaking ceremony of Lotte E&C's construction of the Eco Smart City complex in Ho Chi Minh City. Some $900 million have been invested in the construction of the 60-story building on 680,000 square metres for residential and commercial use.
The chairman will also meet with top Vietnamese officials. Shin's trip to Vietnam indicates that the group has shifted its strategic focus from China. The South Korean retail giant has been looking for ways to grow its retail-to-construction business abroad due to the tension between South Korea and China in recent years.
Lotte announced its withdrawal from China in 2018. Over the following year, the group gradually closed its five department stores in China. At a board meeting last month, Lotte decided to sell its only remaining department store in China.
Meanwhile, Lotte Group has actively expanded its operation in Vietnam. Lotte Group first made its entry into Vietnam in 1998 with its fast-food business Lotteria and has since expanded to 270 locations. The group has a total of 15 Lotte Mart stores nationwide, two department stores, two hotels, and two duty-free stores in Vietnam.
There are 19 Lotte-affiliated firms operating in Vietnam, employing over 11,000 people. Some of its major projects include a 23-story shopping mall complex in Hanoi with a hotel and offices, which is slated for completion in 2023. Lotte Ventures Vietnam was also established last year to promote both local and South Korean startups to venture into the Vietnamese market.
A Lotte Shopping official quoted by The Korea Times said, "We are actively operating in Vietnam and Indonesia currently. The Vietnamese market in particular shows steep growth in the retail business and there is still room to grow. South Korea has a good reputation in Vietnam that helps with our business and people's income levels are rapidly growing too."
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