South Korea-based Lotte Group has not considered withdrawing from the Chinese mainland market, an executive from the Lotte China told the Global Times on Monday, denying media reports that the company will end all of its retail business in the mainland.
The executive, who asked not to identified, nevertheless said that if the current grim situation the company confronted with should continue, and if the company faced huge losses, it would "have to make some changes."
"Changing operational strategies requires surveys and judgment. So far we don't have detailed plans [about strategic changes in the mainland]," the executive said.
Reuters on Monday cited a Lotte official as saying that Lotte may sell all of its supermarkets in China if the current bilateral political tensions continue into 2018.
Lotte's supermarket business was battered in the mainland after it went ahead with a land swap deal in February to let U.S. troops install the Terminal High Altitude Area Defense missile interception system in South Korea, which has aroused strong protests from China.
According to the Lotte China executive, of the 99 Lotte Mart stores in the mainland, only 12 are still operating.
Lotte Group's hotel expansion plans in the mainland are suspended, the company told the Global Times on August 8.
Chen Yuefeng, editor-in-chief of China Chain Store magazine, expressed pessimism about the prospects of Lotte Mart's business in the mainland. "Chinese consumers are now emotionally resistant to Lotte Mart because of the political friction between the two countries, and that situation is not easy to change. I think Lotte will need a long time to recover its business in the mainland," Chen told the Global Times on Monday.
Lotte is not the only South Korean retailer to have had problems in China in recent months. Another South Korean supermarket chain - E-mart under Shinsegae Group, which entered the mainland in February 1997 - may also end its business in the mainland, according to media reports.
According to a report of the South Korea-based MK China on Friday, E-mart sold five of its six supermarkets in the mainland to Thailand-based CP Group. The remaining facility based in Kunshan, East China's Jiangsu Province will also be sold.Shinsegae didn't reply to an interview request from the Global Times as of press time.
"As Chinese consumers become more sophisticated and e-commerce develops, it's hard for traditional supermarkets to respond because of their low service standards and failure to keep up with consumers' changing tastes," he noted.
