A Lotte Group executive says the retail giant will continue to invest in its China business despite diplomatic tensions.
Chinese authorities last month closed dozens of Lotte stores following inspections, ramping up pressure on South Korea’s fifth-largest family-run conglomerate after it agreed to provide land for the US Terminal High Altitude Area Defence (THAAD) missile system outside Seoul.
South Korea and the US say the system is designed to thwart North Korea’s nuclear missile threat, but Beijing says the system’s radar can also reach far into China. This led to Chinese state media calling for a boycott of Lotte businesses.
“We plan to continue to invest in our China business and continue to strengthen it,” executive Hwang Kag-gyu says. He is the head of Lotte Corporate Innovation Office and is regarded as the second-highest executive next to chairman Shin Dong-bin.
“It has been 20 years since Lotte entered the China market. We believe the China business is still in an investment period,” he says.
Out of 99 Lotte hypermarkets in China, 75 have been closed by Chinese authorities. Hwang says the company is working to fix the problems raised by Chinese regulators.
China is Lotte’s biggest overseas market, generating more than 3 trillion won (US$2.7 billion) in annual revenue in 2015. It is also one of four strategic markets along with Indonesia, Russia and Vietnam that Lotte has been focussing on.
