Seoul: Lotte Shopping Co., an affiliate of the South Korean retail conglomerate Lotte Group, has announced plans to establish a business entity in Singapore during the first half of the year as part of its strategy for continued growth. The decision was disclosed by the company’s Chief Executive Officer, Kim Sang-hyun, during the annual shareholders meeting, where he highlighted the need to explore international business opportunities due to a saturated domestic market and sluggish demand in Korea.
According to Yonhap News Agency, the Singapore subsidiary will focus on projects to develop large-scale shopping malls, similar to Lotte Mall West Lake Hanoi, and aims to expand exports of Lotte’s private brand products to the United States and Southeast Asia. Lotte Mall West Lake Hanoi attracted over 10 million customers within a year of opening in September 2023. This year, Lotte Shopping aims to enhance sales and profits by concentrating on value-added products and strengthening its global market presence.
Lotte Shopping faces challenges such as high inflation and interest rates affecting consumer sentiment. CEO Kim stated that the company plans to enhance its fundamental competitiveness as a retailer and explore new markets to counter these challenges. In a related development, Lotte Group Chairman Shin Dong-bin has returned as a registered director of Lotte Shopping’s board to ensure “responsible management” of the core retail business. Shin had previously resigned from the position in March 2020 due to concerns raised by the National Pension Service regarding his multiple decision-making roles within the group’s affiliates.
Shin currently holds director positions at Lotte Holdings Co., Lotte Chemical Corp., Lotte Wellfood Co., and Lotte Chilsung Beverage Co. However, Lotte Chilsung’s board is expected to approve a proposal from the chairman not to extend his director position in the beverage firm at its upcoming shareholders meeting. Financially, Lotte Shopping experienced a shift to a net loss of 984.26 billion won (approximately US$670 million) in 2024, compared to a net profit of 169.18 billion won the previous year. Operating profit decreased by 6.9 percent to 147.2 billion won, while sales declined by 3.9 percent to 13.9 trillion won during the same period.
Despite these setbacks, Lotte Shopping aims to achieve an operating profit of 600 billion won with sales reaching 14 trillion won this year. As the operator of South Korea’s largest department store chain by sales and the second-largest discount store chain, Lotte Shopping continues to focus on strategic growth and expansion efforts.