"Must Find a Way to Survive"... Shin Dong-bin, Lotte Chairman, Orders Review of Business Strategy

Lotte Conducts 2020 Second Half VCM
"Need to Review Business Strategy"... Preparing for 'Post-Corona'
Sharing Second Half Management Plans and Discussing Innovation Strategies for Future Growth

[Asia Economy Reporter Seungjin Lee] Shin Dong-bin, Chairman of Lotte Group, emphasized, "We need to reflect on our past business strategies."

Chairman Shin made these remarks on the 14th during the '2020 Second Half Lotte VCM,' which shared the second half management plan and discussed innovation strategies for future growth. Due to the impact of the novel coronavirus (COVID-19), the VCM was held in the form of a webinar.

Chairman Shin pointed out the recent economic difficulties, saying, "The 'With Corona' era, coexisting with COVID-19, seems likely to continue until the end of next year. Economic activities are expected to shrink to about 70-80% compared to 2019, and I believe this '70% economy' has become the new normal."

He continued, "We must find ways to survive in this new normal '70% economy,'" adding, "This could be a good opportunity to reconsider the ways we have been working so far." He also stressed, "Reducing waste in work processes and improving work efficiency is the first task for CEOs."

Chairman Shin also called for a comprehensive review of business strategies. He noted, "The IMF crisis in 1998 and the Lehman Shock in 2008 could be overcome by enduring well for one to two years, but the current situation is completely different," emphasizing, "We need to look back on our past business strategies."

In particular, he highlighted the need to reassess international trade and globalization amid the global spread of infectious diseases. Chairman Shin said, "Many production facilities were relocated overseas for production optimization, but now rebuilding reliable supply chains is gaining momentum, and investments are being reshored. It is also a politically unstable time internationally," underscoring the necessity for a different approach to overseas business.

He mentioned various domestic business opportunities and urged the discovery of synergies between companies. Since returning from Japan in early May and completing a two-week self-quarantine, Chairman Shin has been visiting Lotte business sites nationwide, including Seoul and the metropolitan area, every weekend.

Regarding his recent consecutive visits to retail stores and other sites, Chairman Shin said, “By going there in person, I saw both strengths and shortcomings,” emphasizing, “In such difficult times, the competitiveness of our core business is crucial.”

He also stressed, “While achieving digital transformation (DT) and discovering new businesses or growth engines are important, it is also essential to reaffirm the competitiveness of the businesses we have been conducting.” He urged CEOs, “Do not be too discouraged by the difficult economic situation, do not be bound by short-term performance, and strive to strengthen competitiveness through innovation in the core business from a long-term perspective.”

Finally, Chairman Shin quoted British Prime Minister Benjamin Disraeli’s saying, "Expect the best, prepare for the worst," and urged, "If we prepare for the worst while expecting the best, we will be able to overcome the crisis well."

Due to COVID-19, the VCM was conducted in small groups in eight conference rooms set up at three hubs?Jamsil (5 rooms), Sogong (2 rooms), and Yangpyeong (1 room)?to comply with social distancing guidelines. About 90 people attended, including Lotte Holdings CEOs and executives, heads and executives of four BUs, and CEOs of affiliates.

This content was produced with the assistance of AI translation services.