Close-down in China
The Korea Economic Daily reported on April 25 that E-Mart will make a total withdrawal from China within this year.
The newspaper quoted industry sources by saying "E-Mart decided to close down all six remaining stores within this year as the company judged that it would be difficult to maintain its business operation in China."
In 1997, E-Mart launched its first store in Shanghai, and dialed up its number of stores in China to 26. Its entry into China was the first in the Korean distribution industry. However, since 2011, E-Mart has cut back on stores due to difficulties in making profits.
The Korean news outlet analyzed that even though anti-Korean sentiments triggered by the deployment of the THAAD system contributed to E-Mart’s withdrawal, the main cause of the failure was that E-Mart failed to overcome its weaknesses as a latecomer in the Chinese market. In a nutshell, E-Mart failed in localization after making a foray into China.
"In China, a distribution company can address logistics issues such as transportation if the company secures cooperation with big dealers who deal in products on a large scale in their regions. It may have been not easy for E-Mart to maintain amicable relationships with the big dealers,” an official in the Korean distribution industry said to the Korea Economic Daily.
Meanwhile, Lotte Mart, which is restructuring its business in China, put its business to a half because of the THAAD issue. CJ O Shopping, which entered China in the form of a joint venture, also sold off most of its stake to the Chinese side and virtually withdrew from China.