Lotte Group embraces Vietnam’s potential while withdrawing from China, capitalizing on the country’s promising market opportunities.
- Lotte Group shifts focus: Vietnam’s retail and F&B industries.
- Expansion plans: Lotteria restaurants, Lotte Mart hypermarkets, and more.
- Vietnam’s growth potential: Favorable market conditions and rising consumer income.
- As per Ken Research, the company’s retaliation aftermath will lead to strategic realignment.
South Korea based Lotte Group, the country’s fifth-largest conglomerate, is accelerating its expansion in Vietnam’s retail and F&B sectors as it finalizes its recent withdrawal from the Chinese market. Following his recent release from jail and receiving a presidential pardon, Chairman Shin Dong-bin is poised to visit Vietnam, signaling the group’s determination to pursue business in its “third-most important market” after South Korea and Japan. Lotte’s focus on Vietnam comes as the company’s top executives have been closely monitoring their opportunities in the country, recognizing the growth potential and favorable business environment.
1. Growing Presence in Vietnam
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Lotte boasts an expansive presence in Vietnam, with 270 Lotteria fast-food restaurants and 15 Lotte Mart hypermarkets. Additionally, Lotte’s subsidiaries are actively involved in the development of shopping complexes and residential apartments in major cities like Hanoi and Ho Chi Minh City. The establishment of Lotte Ventures Vietnam last year further solidifies the group’s commitment, making it the very first foreign venture capital firm approved in the country.
2. Vietnam’s Favorable Market Conditions
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The decision to focus on Vietnam is driven mainly by the country’s strong retail sector, experiencing significant growth, and a rising disposable income level. Lotte recognizes Vietnam’s potential as a strategic market, benefitting from Korea’s positive reputation and strong consumer demand. The group views Vietnam as a key growth driver in the region, offering ample opportunities for expansion and development.
3. Exit from China
Lotte’s exit from the Chinese market comes after 14 years of operation, as it faced challenges due to alleged retaliation from China following the deployment of the THAAD missile defense system in 2017. The decision to fully divest from China reflects the company’s strategic realignment and its focus on emerging markets with more favorable growth prospects.
Lotte Group’s intensified focus on Vietnam’s retail and F&B industries signifies its commitment to leveraging the country’s growing market potential. As per Ken Research, as the conglomerate completes its withdrawal from China, it aims to capitalize on Vietnam’s favorable business environment and consumer-driven growth. Lotte’s expansion efforts in Vietnam highlight its strategic vision and determination to establish a strong presence in one of Southeast Asia’s most promising markets.