BIZCHINA / Overseas Investment
South Korean retail king to open on mainland
(Shanghai Daily)
Updated: 2006-11-01 14:16
Lotte Shopping Co, South Korea's biggest department store operator, said
yesterday it plans to open its maiden store on the Chinese mainland in
the first half of 2008 to tap the country's booming consumer purchasing
power.
Seoul-based Lotte signed an agreement yesterday with Zhejing Intime
Department Store Co, an arm of China Yintai Holdings Co, to set up a
local venture, the South Korean firm said in a regulatory filing.
Both companies will take equal stakes in the Beijing-based venture, the
statement said, without disclosing the investment amount.
The duo will initially invest about US$10 million to open a store in
Beijing's Wangfujing area, Reuters reported early yesterday ahead of the
company statement, citing an unnamed source.
Lotte, led by Chief Executive Lee In Won, has been diversifying its
businesses in countries such as China and Russia as competition
intensifies in its US$120 billion retail market at home.
Economists expect South Korea's retail market to expand nearly 2.5
percent annually through 2008 while China's US$970 billion market will
grow at least 10 percent a year.
The Beijing store will be Lotte's second overseas outlet as the company
is on track to set up a department store in Moscow in the first half of
next year, according to the statement. Lotte also said it is considering
entering the Vietnam market.
Lotte raised 3.4 trillion won (US$3.6 billion) in an initial public
offering this year. The company said in January it plans to add six new
department stores by 2010 and 28 discount stores by 2007.
Lotte controls 44 percent of South Korea's 16.5 trillion won department
store market and 12 percent of the country's 21.5 trillion won discount
sector, according to Bloomberg data.
(For more biz stories, please visit Industry Updates)
Learn Chinese online
