As a boycott of Japanese goods continues following Japan’s restriction of exports to Korea, woes are growing among local distribution companies.
Lotte Group has been hit the hardest by the boycott as it has many joint ventures with Japanese companies. Lotte Shopping has a 49 percent stake in Uniqlo Korea while Lotte Corp. owns a 40 percent stake in Muji Korea and Lotte Chilsung Beverage a 50 percent stake in Lotte Asahi Liquor. Uniqlo Korea suffered a drop of more than 30 percent in sales after an executive at its headquarters in Japan dismissively said, “The boycott movement in Korea will not last long.” Sales of Asahi beer distributed by Lotte Asahi Liquor plunged up to 40 percent in the retail channels such as large retail stores and convenience stores.
Since July 26, Lotte Mart has suspended orders for six major Japanese beer brands -- Asahi, Kirin, Sapporo, Suntory, Ebisu, and Okinawa (Orion in Japan) for the first time among large retail stores. In addition to Lotte, other large retail stores such as E-Mart and Homeplus are not able to place new orders due to slumping sales of Japanese products.
Major Lotte Group affiliates including Lotte Shopping, Lotte Food, Lotte Corp. lost 20 to 30 percent in their stock prices in July. The boycott movement is showing signs of spreading as some people insist that Korean consumers call for boycotting “Cheoeum Cheoreom” soju products produced and distributed by Lotte Liquor and cookies and snacks of Lotte Confectionery, too. "During China’s retaliation against South Korea for the deployment of the THAAD system, we received a great disadvantage in China because the Chinese people regarded Lotte as a Korean company. We are now misunderstood as a Japanese company in Korea," a Lotte official said. "We have no choice but to work harder to gain customers’ sympathy."
Coupang, an e-commerce company, suffered from the rumor that it is a Japanese company. "Coupang was established in Korea, with more than 99 percent of its business done in Korea," Coupang said in a statement on its website. With reference to its stock ownership that underpins the claim that Coupang is a Japanese corporation, the company said that its high foreign stock ownership does not necessarily mean it is a foreign company. It noted that foreign equity ownership at KB Financial Group approaches 70 percent, while that of Samsung Electronics and Naver nears 60 percent.
However, some netizens are still doubtful, saying that the Softbank Vision Fund (SVF) managed by Softbank CEO Masayoshi Son who is a Korean Japanese invested US$2 billion on two separate occasions. Since Coupang is not a listed corporation, its exact equity structure has never been disclosed. "The largest shareholder of the SVF is Saudi Arabia's Public Investment Fund (PIF) with a 45 percent stake and Softbank has a 28 percent stake in it," a Coupang official said. "The SVF is not a Japanese fund. The claim that Coupang is a Japanese company is groundless and ridiculous."