According to industry sources on January 24, Lotte Home Shopping is planning to withdraw from the Chinese market and many other South Korean retailers in China are likely to follow suit due to its THAAD retaliation and excessive regulations.
Lotte Home Shopping entered the Chinese market back in July 2010, when it acquired 63.2% of Lucky Pai, which was the third-largest home shopping company in the market at that time, for US$130 million. However, it had to deal with problems related to licensing and joint venture formation, as well as increasing losses, from the get-go.
CJ O Shopping, in the meantime, is currently disposing of Nanfang CJ in Guangzhou. Nanfang CJ’s annual losses skyrocketed from three billion won to 20.1 billion won between 2014 and 2016. Hyundai Home Shopping, which stopped broadcasting in China in 2016, has been in management disputes with local companies since that year. Hyundai Home Shopping is likely to leave the Chinese market as well if the international arbitration in Singapore does not end well.
Large South Korean supermarkets are leaving the Chinese market at an even more rapid pace. For example, e-mart sold five out of its six stores in China to CP Group of Thailand last month to complete its withdrawal from the Chinese market. e-mart entered the Chinese market in 1997 and used to run as many as 26 stores there. Lotte Mart is attempting to sell all of its 112 stores in China in a lump.