Lotte Nears Exit from China... Bloomberg Reports "Korean Conglomerates Fleeing"

Final Stage of Headquarters Closure
Large Corporations like AmorePacific Scale Down Operations

Inside Lotte Mart Supermarket in Beijing, 2017 (Photo by Bloomberg News)

[Asia Economy Reporter Kim Hyunjung] Bloomberg reported on the 8th (local time) that Lotte Group's withdrawal from China is imminent. Due to restrictions on economic activities such as city lockdowns caused by COVID-19, the departure of large corporations like AmorePacific, Samsung Display, and LG Electronics is accelerating.

The news agency, citing a source familiar with the company's situation, stated, "Lotte Group, a major retailer operating department stores and supermarkets, is in the final stages of closing its China headquarters," adding, "They are shifting their focus to other Asian markets." Lotte Group reportedly declined to comment officially on this matter.

Furthermore, cosmetics manufacturer AmorePacific Group has also closed more than 1,000 stores amid the chaos of the pandemic and is focusing on expanding online sales. AmorePacific recorded revenue of 208 billion KRW in its largest market, China, in 2016, but is currently expanding its presence into the U.S. and Southeast Asian markets.

Regarding the status of major Korean manufacturing companies such as Samsung Display and LG Electronics, the report stated, "Some factories have already been closed due to uncertainty caused by China's continuous and intensive lockdowns." Scott Kim, who served at the Korea Trade-Investment Promotion Agency (KOTRA) offices in Shanghai and Beijing, commented, "China's zero-COVID policy is excessive, and local companies are catching up with Korean firms," adding, "It would be better for Korean companies to abandon the illusion of making money in China."

In particular, since the deployment of South Korea's Terminal High Altitude Area Defense (THAAD) system in 2017, which led to tensions between South Korea and China, conditions for local companies have worsened. According to a survey conducted by the Federation of Korean Industries in December last year, about 86% of 131 domestic companies responded that China's economic situation has deteriorated over the past decade. Political risks were cited as the biggest reason, followed by discrimination against foreign companies, the U.S.-China trade conflict, strengthened environmental regulations, and high production costs.

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