Lotte Group Chairman Shin Dong-bin said, “Lotte should forget past success experiences, pursue new innovation and make differential success methods corresponding to the environment of the present.”
Chairman Shin made the remarks while speaking at the Value Creation Meeting, a meeting for subsidiary CEOs in the second half of this year, at Lotte World Tower in Jamsil, Seoul, on July 18.
Chairman Shin presented his new management keywords: “Unlearning Innovation.” During the meeting, he stressed the need to change business perspectives and attitudes.
Among those on hand at the meeting were Lotte Group’s 80 executives, including Lotte Corp. CEO Lee Dong-woo and CEOs of its subsidiaries.
Also in attendance was Shin Yoo-yeol, the eldest son of Lotte Group Chairman Shin, who serves as vice president of Lotte Chemical and concurrently CEO of Japan Lotte Financial.
Chairman Shin’s tone was said to be determined. Lotte Group Chairman Shin’s remarks may be construed as his demand to purse fundamental reform to overcome a crisis the group is facing.
Lotte Group has been ranked fifth for 13 years among conglomerates in Korea, but the business group suffered a setback: placing 6th in April, trailing POSCO.
The department store business, Lotte Group’s mainstay sector, is stilling lagging.
Lotte Department Store’s Myeongdong Outlet, which ranked 1st for the past 39 years, yielded the top position to Shinsegae Department Store’s Gangnam Outlet in 2017.
Lotte Department Store’s Jamsil Outlet stayed second. Lotte Chemical, Lotte Group’s core business, posted a sluggish business performance: logging operating losses for the fourth consecutive quarter since the second quarter of last year.
Chairman Shin, recognizing internal and external economic crises, called for responding to “permacrisis in the VCM” for the first half of the year. He stressed sustainable growth in the latest VCM.
Chairman Shin urged the participants to explore driving forces in foreign markets to overcome the current crisis.
“The overseas business is an ineludible choice, and the national economy is predicted to maintain a low-growth trend due to aging and declining population,” he said.
His remarks may be interpreted as his demand to secure preoccupancy by making inroads into Southeastern, European and North American markets.
Chairman Shin also emphasized future businesses. “AI technology is expected to bring about dramatic changes, as the Internet and mobile technologies did in the past,” he said.
Prior to the VCM, the business group invited a Microsoft official, who spoke about how to use generative AI in the business sector.
Chairman Shin also called for the strengthening of managing cash flows and capital costs on top of outside growth like sales and profitability.
Lotte Corp. CEO Lee shared the business group’s H1 business performance and suggested guidelines for sustainable growth, such as overseas business strategies and an execution of efficient investments.
The participants also shared the current status of new growth engines the business group is nurturing, like health and wellness and mobility.
Lotte Biologics plans to build three mega plants, capable of producing 360,000 liters of antibody drugs by 2030.
Lotte Health Care will launch the health care platform “Cazzle.” Cazzle is a platform designed to offer integrated services, such as health functional foods, workout items and diets tailored according to outcomes of data analyses, such as gene testing and health examination.
In the mobility sector, Lotte Group plans to ramp up business capabilities in areas, such as self-driving shuffle, EV charging infrastructure and urban air mobility with Lotte Data Communication Co. taking the initiative. Each business group came up with strategies to ramp up competitiveness.
The food group announced ways of improving profitability by upgrading the conventional value chains while the distribution group discussed ways of upgrading its portfolio, such as lifestyle to realize the vision “customers’ first shopping destination.”
The chemical group shared strategies to nurture new businesses, such as the battery material business and hydrogen/ammonia.