Click on the image for details According to South Korean media reports, due to the impact of the deployment of the THAAD anti-missile system in South Korea, Lotte Mart's performance in China has been dismal and unsustainable, leading to the final decision to sell its supermarket operations in China. Lotte Group had previously wanted to maintain its operations in China, but due to a 'bleak future', it chose to dispose of Lotte Mart. Original report The report states that, according to a Chinese local investment bank on the 14th, Lotte Mart recently selected a lead company to handle the sale of its supermarkets in China and has officially begun the relevant process. The scope of the sale has not yet been determined, and the possibility of selling all its supermarkets in China is not excluded. The report says that because most of Lotte Mart's supermarkets in China are experiencing operational difficulties, the company's losses are 'snowballing', leading to the decision to sell its supermarkets in China. Originally, Lotte had hoped that after the Moon Jae-in government came to power, Sino-Korean relations would improve and Lotte Mart's business could be revitalized. However, the recent deployment of the remaining THAAD launchers by the South Korean government will further freeze bilateral relations. Of Lotte Mart's 112 stores in China, 87 have ceased operations, and the remaining stores are effectively in a state of closure. Lotte has been repeatedly exposed to plans to sell its supermarkets in China, but has 'firmly denied' them Previously, there were multiple reports that Lotte Group was planning to sell its Lotte Mart supermarket business in China, with South Korean media citing various sources and suggesting that under the shadow of THAAD deployment, Lotte might be trying to cut its losses. However, Lotte Group subsequently denied and urgently clarified these reports, stating, 'We will never give up our business in China!' 'Lotte Shopping is considering selling its supermarkets in China,' reported Reuters on September 11. The report quoted a Lotte management official as saying, 'If the political tension between Seoul and Beijing continues into next year, Lotte will evaluate a sale or other options.' A senior Lotte executive, who requested anonymity due to the high sensitivity of the issue, said, 'It is natural for us to have various options, but there are currently no discussions or decisions on further detailed plans.' He did not elaborate on what other options were being considered. The report also cited a September 9 report from South Korea's Chosun Ilbo quoting a Lotte Group executive, saying that Lotte plans to gradually sell 50 of its 99 Lotte Mart stores to reduce manpower. Chosun Ilbo: Half of China's Lotte Mart to be sold, significant manpower reduction In South Korea, news that Lotte would sell its Lotte Mart stores in China has been circulating for several days. On the 11th, South Korea's Chosun Ilbo quoted a Lotte senior executive as saying that Lotte plans to sell more than half of its supermarkets in China, and except for retaining essential store staff, other personnel will be laid off in batches by 90%. The executive added that this move does not mean Lotte will withdraw from its China business; rather, Lotte is preparing for a long-term 'battle' and currently has to 'reluctantly make sacrifices' to adjust its business plans. However, in response to widespread rumors that Lotte would sell its supermarket business in China and carry out large-scale layoffs, Lotte Group issued a denial statement on the 11th, two days earlier, saying that Lotte is studying the restructuring of all its industrial assets, but 'whether to withdraw from Lotte Mart's China business' is not the subject of this asset restructuring discussion. South Korea's Newsis news agency reported on the 11th that Lotte urgently clarified that Lotte Group is currently not discussing any matters related to withdrawing from the Chinese market. Not only the Lotte Mart supermarket business, but also more than 20 related subsidiaries, including Lotte Department Store, Lotte World, Lotte Confectionery, and Lotte Cinema, have entered the Chinese market. Considering the market size and growth potential of its Chinese enterprises, Lotte will never give up its business in China. News report of Lotte denying withdrawal from China Also expressed emergency capital injection and stated: firmly not withdrawing from China Just earlier, on August 29, Lotte Group stated that it would provide a second round of emergency capital injection for Lotte Mart, which is facing operational difficulties in China due to the THAAD issue. At that time, Lotte Group said that Lotte Mart had already lost 500 billion Korean won (approximately 2.9 billion RMB) in China, and if the suspension continued until the end of the year, the loss would reach 1 trillion Korean won (approximately 5.9 billion RMB). A Lotte official said, 'After the second round of capital injection, Lotte Mart should be able to hold on in China until the end of the year. We hope that some stores can resume operations by the end of this year or early next year.' Source: Shilijia Click on the image for details The 3rd (CFIC) China FMCG + Internet Conference will be held in Chongqing in October 2017. The conference will closely focus on the theme 'New Forces, New Ecosystem', inviting 1000+ distributors, 500+ brand owners, founders of 200+ B2B platforms, and 100+ investment and financing institutions to jointly explore a new chapter of cross-border integration! Core topics of this conference:
How can the FMCG industry leverage B2B to achieve new growth opportunities
How to build the new supply chain behind new retail
How can intra-city logistics help B2B achieve leapfrog development
Highlights of this conference:
The industry's first '2017 China FMCG B2B Industry Competitiveness White Paper'
Case sharing of excellent distributors in transformation and upgrading
Conference + exhibition upgrade: Hall 6 Internet Technology Exhibition strengthens networking
Leaders from various fields, including Alibaba Retail Link, GL Capital, EASIA Supply Chain, Best Store Plus, Yijiupi, Unilever, Hdinfo, and Yunmei, will deliver speeches and share pioneering views.
November 8-9, 2017 Chongqing International Expo Center Registration is now open. Long press the QR code below or click 'Read Original' to register. Early bird tickets before September 15 enjoy a 30% discount! Add friend with note 'Conference Registration' Click the links below to review the highlights of the 1st and 2nd FMCG + Internet Conferences: 2016 'FMCG + Internet' Summit Forum 2017 (2nd) China FMCG + Internet Conference Click the links below to review the highlights of the 1st and 2nd FMCG + Internet Conferences: 2016 'FMCG + Internet' Summit Forum -END-