Lotte Mart expands chain footprint to the capital
Lotte Mart expands chain footprint to the capital
South Korea’s supermarket giant Lotte Mart inaugurated the first giant new shopping centre in the northern area in Hanoi’s Mipec Tower last week as part of its aggressive expansion in the run-up to Vietnam opening the doors to foreign retailers.
According to Vietnam’s World Trade Organization (WTO) commitments, from January 11, 2015, Vietnam would permit the establishment of wholly foreign owned retail businesses. Currently, foreign firms are constrained by being forced to enter into joint ventures with Vietnamese partners or via franchising.
According to Hong Won Sik, general director of Lotte Mart Vietnam, there will have an investment wave from foreign retailers in Vietnam as WTO commitments take effect next year.
He said that at that time, Vietnam’s retail market would become more competitive and Lotte had therefore concentrated on establishing a firm foothold before the floodgates opened.
Sik revealed that by the end of this year, Lotte Mart would open more three shopping centres in Hanoi, Ho Chi Minh City and Ba Ria-Vung Tau. The South Korean retailer aimed to expand its chain to 60 supermarkets nationwide by 2020.
Lotte Mart Dong Da, its first shopping centre in Hanoi, is its seventh in Vietnam. The $25 million 20,000 square-metre four floor leased outlet at Mipec Tower will offer a shopping experience including a range of entertainment services and supermarket.
Lotte Mart entered Vietnam in 2006 as a joint venture with a local partner based in Ho Chi Minh City. According to the investment certificate that Lotte Mart won in October 2006, the firm boasted the initial investment capital of $65 million, with the local partner Minh Van Company, holding a 20 per cent stake.
In October 2012 Lotte Mart received Ho Chi Minh City authorities’ approval to turn its joint venture into a 100 per cent foreign-invested company. At the same time, the Korean investor raised its chartered capital to $120 million with an aim to developing more projects in Vietnam in the future.
Lotte Mart now has six retail centres in Ho Chi Minh City, Dong Nai, Danang, Binh Duong and Binh Thuan.
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