Lotte Invests Big In Vietnam, ‘a Core Center of Asia’

Lotte Group Chairman Shin Dong-bin delivers a speech at a ceremony to open Lotte Mall West Lake in Hanoi on Sept. 22.

Lotte Group Chairman Shin Dong-bin is accelerating efforts to explore the Southeast Asian market.

In particular, motivation for Lotte, looking to make Vietnam a “core center of Asia,” replacing China, is rising.

Chairman Shin, along with his eldest son and heir-apparent, Vice President Shin Yoo-yeol of Lotte Chemical, attended an opening ceremony for Lotte Mall West Lake on Sept. 22.

Lotte Mall West Lake, named after West Lake, Hanoi’s biggest lake, is a mega project involving all capabilities of the group’s subsidiaries, including Lotte Department Store, Lotte Mart, Lotte Hotel, Lotte World and Lotte Culture Works, so it is dubbed “Hanoi’s version of Lotte World Mall in Korea.”

Lotte Mall West Lake, costing about 800 billion won, is the biggest-ever project Lotte Group has invested in Vietnam.

Lotte Group plans to make Lotte Mall West Lake, a landmark representing not only Hanoi, but also Vietnam.

A whole view of Lotte Mall West Lake. (Photos: Lotte Group)

In his speech at the event, Chairman Shin said, “Lotte Mall Lake West Hanoi is a mega project Lotte Group has mobilized all of its capabilities by investing $643 million since the launch of a land site development was launched in 2016, and I expect it to become a landmark of Hanoi, thus contributing to the development of the regional economy and Vietnam.”

Chairman Shin has been hitting the gas to explore the market in Southeast Asia, as he has made a visit to Vietnam following his trip to Indonesia.

Lotte has identified the Southeast Asian market as one with growth potential, replacing China, in which the business group has withdrawn due to declining market share, caused by China’s retaliation against the deployment of the U.S. antimissile defense system THAAD in Korea.

It was in 1998 that Lotte Group set foot in Vietnam for the first time by opening an outlet of Lotteria.

But Lotte Group had focused on China, a bigger market, with an ambitious goal of achieving 100 trillion won in annual sales.

The business group was hit the hardest by China’s retaliation, so it was forced to withdraw.

Chairman Shin seized upon Vietnam’s higher growth rate and potential. Despite the spread of the COVID-19 pandemic in 2020 and 2021, Vietnam kept growing.

The Southeast Asian country saw its economic growth rate decline from 2.94 percent in 2020 to 2.59 percent in 2021, but soared to 8.02 percent in 2022, the highest-ever level since 2011.

Youth in their 20s and 30s, favoring Korea, account for about 70 percent of Vietnam’s population.

Experts see Vietnam’s economic growth rate surpassing China’s.

Figures, released by the OECD, showed that Vietnam is forecast to grow at 6.4 percent, the highest level among Southeast Asian countries, comparable to China’s 5.3 percent and India’s 5.9 percent.

Lotte Group’s opening Lotte Mall West Lake is expected to serve as an opportunity to expand its overseas business in Southeast.

At a meeting with reporters following the opening event, Chairman Shin said, “I wish for engaging in brisk business activities in several areas, including the distribution sector, in core areas, deemed to be core parts, like Ho Chi Minh City, Vietnam, and Jakarta, Indonesia.”

Chairman Shin told the Value Creation Meeting (VCM) for the second half of 2023 that Korea will maintain a low growth rate trend due to declining population, and the overseas business is now “an unavoidable choice.”