Turning Eyes

E-mart is planning to sell its five stores in China to the Charoen Pokphand Group.
E-mart is planning to sell its five stores in China to the Charoen Pokphand Group.

 

It has been found that e-mart is planning to sell its five stores in China to the Charoen Pokphand Group. At present, the Thai conglomerate is running Lotus supermarkets in China.

The South Korean retailer launched its business in China 20 years ago and the number of its stores in the country used to be as many as about 30. However, its losses have accumulated and it is currently running only six there after business restructuring. The retailer’s losses in China amounted to 21.6 billion won (US$19.4 million) in 2016 alone and more than 150 billion won (US$135 million) from 2013 to last year.

Lotte Mart, in the meantime, already shut down most of its 112 stores in China with losses piling up. Its emergency capital injection amounted to 360 billion won (US$324 million) in March this year and 340 billion won (US$306 million) is planned to be spent in addition for the same purpose in the near future. At present, Lotte Mart is continuing to pay fixed costs in China in spite of the lack of sales in the country. It recently announced that it would not withdraw from the Chinese market, but its losses in China are estimated to reach one trillion won this year.

“Despite China’s economic retaliation following THAAD deployment in South Korea, the country with a population of more than 1.3 billion is a very important market for South Korean retailers,” said an industry source, adding, “Still, more and more of them are turning their eyes toward Vietnam, Cambodia, Laos and so on due to the fierce competition in the Chinese retail market and the difficulty of localization there as well as the economic retaliation.”

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