Lotte Group, a major South Korean conglomerate, has officially exited its ambitious theme park project in Shenyang, China, marking another step in its broader retreat from the Chinese market. This move comes after years of operational challenges heightened by geopolitical tensions between the U.S. and China.
On Friday, Lotte officials announced the sale of its entire stake in Lotte Glory Properties Shenyang, which was managing the large-scale project, to a Chinese company affiliated with the Shenyang city government. The financial details were not fully disclosed, but industry sources estimate the transaction’s value at approximately 450 billion won ($327 million).
The sale has not yet been finalized in terms of payment, according to a Lotte Group spokesperson. The project, initially launched with a projected investment of 3 trillion won, was set to encompass a department store, hotel, theme park, cinema, and residential area over a 1.45 million-square-meter area. However, construction was halted in 2016 due to a significant backlash from China following Lotte’s involvement in the THAAD missile defense system deployment in South Korea, which Beijing viewed as a security threat.
The repercussions from this decision were severe for Lotte, which once had over 100 Lotte Mart stores, multiple department stores, theaters, and other operations spread across China. By 2018, the company had withdrawn most of its retail and food distribution businesses in the region, facing substantial financial losses without recovering most of its initial investments.
In response to exiting the Chinese market, Lotte has redirected its focus towards Southeast Asia, tapping into the vibrant economies of Indonesia and Vietnam. The region’s growing affinity for Korean products and culture presents new opportunities for Lotte. The company has been expanding its presence in these countries, operating 48 stores in Indonesia and 16 in Vietnam, alongside significant developments like the Lotte Mall West Lake Hanoi in Vietnam’s capital.
This strategic pivot to Southeast Asia reflects Lotte’s adaptation to the shifting dynamics of international business and regional geopolitics, as it seeks to leverage emerging markets to offset the challenges encountered in China.
