April 23, 2024

• 

[THE INVESTOR] Lotte Group is likely to consider investing more money in its supermarket chain in China, according to a local report on Dec. 8.

The move comes amid Beijing’s continued economic retaliation against Lotte over Seoul’s decision to deploy THAAD missile system here. The government has still not lifted its business suspension of 87 out of the total 112 Lotte Marts in China. During the suspension, the firm is required to pay up to 70 percent of employee salaries under local labor laws.

Lotte injected US$300 million in August to revive the sluggish operations of its supermarket chain in China, but the funds have reportedly been used up.

“We can consider injecting more money, if the current situation continues,” a Lotte Mart spokesperson told The Investor.

The funding in August followed the investment of 360 million won (US$319.26 million) in March. Instead of injecting additional money for the third time, the company announced in September that it has decided to close its discount supermarket chains in China.

However according to the report, the company’s original plan of exiting China by the year-end, may not be possible. A company official reportedly said that the Korean retail giant is still at a stage where it is discussing with a few companies to sell its chain in China. Moreover, industry watchers say that the deal will take time due to the influence of the Chinese government.

China’s National Tourism Administration recently announced it will allow offline tourist agencies in Beijing and Shandong province to sell package tours to Korea, but did not allow them to include Lotte’s hotels, resorts and duty-free stores in their packages.

By Song Seung-hyun (ssh@heraldcorp.com)