Lotte Mall West Lake Hanoi, a large shopping mall in Vietnam, has been operating successfully since its opening in 2023. (Image courtesy of Lotte Shopping)
SEOUL, Jan. 6 (Korea Bizwire) — With South Korea facing its worst domestic retail downturn since the 2008 global financial crisis, major retailers are accelerating their international expansion plans in search of new growth opportunities.
On January 5, industry sources revealed that Lotte Department Store is planning to expand overseas with its next-generation shopping complex brand, Time Villas. As part of its medium to long-term strategy to increase overseas revenue, the company is currently scouting locations primarily in Southeast Asia, including Vietnam.
Lotte Department Store opened the first Time Villas location in Suwon in October of last year. The company plans to invest 7 trillion won to expand to 13 domestic locations by 2030. In December, CEO Jung Jun-ho expressed his ambition to “showcase K-retail’s competitiveness in overseas markets” through the company’s official YouTube channel.
The retailer has already seen success with its overseas ventures. Lotte Mall West Lake Hanoi, a large shopping mall in Vietnam, has been operating successfully since its opening in 2023.
Buoyed by this success, Lotte Shopping’s overseas business recorded sales of 1.21 trillion won in the first three quarters of 2024, up 4.7% from 1.16 trillion won in the same period the previous year. While overseas sales currently account for 11.5% of Lotte Shopping’s total revenue, the company expects this figure to reach 20% within several years with the addition of Time Villas.
Shinsegae Group is focusing on expanding its E-mart and No Brand stores internationally. Like Lotte, the group is targeting Asian markets such as Southeast Asia and Mongolia. E-mart is also accelerating its market penetration in Laos, which it has designated as a strategic base in Southeast Asia following Vietnam, where it operates three stores.
Convenience store chains are also strengthening their overseas operations. GS25, operated by GS Retail, recorded exports of approximately $9 million in 2023, a 60-fold increase from 2017′s 220 million won.
The company’s export destinations have expanded to over 30 countries across Asia, North America, and Europe. GS25 plans to increase its store count in Vietnam from 355 to over 500, and in Mongolia from 267 to over 500 this year.
CU, another major convenience store chain, achieved $8 million in exports last year and is targeting $10 million for this year. The chain aims to expand its Mongolian stores from 432 (as of November 2024) to 500 this year, with similar expansion goals for Malaysia by 2028 and Kazakhstan by 2029.
This push for international expansion comes as retailers are looking to reduce their dependence on the struggling domestic market, which is affected by population decline and a sluggish economy. Industry experts project an even more challenging year ahead, citing the current economic downturn, weak consumer sentiment, high exchange rates, and inflation.
Ashley Song (ashley@koreabizwire.com)
