Lotte is eyeing several investment projects in Vietnam, including a trading center in Hanoi that can attract 10 million visitors a year, group chairman Shin Dong-bin said Wednesday.
The South Korean conglomerate also plans to invest in startups in Vietnam, bolstering the country’s startup ecosystem, Shin Dong-bin said in a meeting with President Nguyen Xuan Phuc in Hanoi, according to the Vietnamese government's portal.
The Lotte Group considers Vietnam its third- most important market after Korea and Japan, it was said. The company currently operates 270 Lotteria restaurants - a burger chain operated by Lotte GRS, and 15 Lotte Mart stores owned by Lotte Shopping in Vietnam.
After entering Vietnam in 1996, the group has invested about VND40,000 billion ($1.7 billion) in the country and employed 20,000 people, government data shows.
The South Korean group’s latest project in Vietnam is the Lotte Eco Smart City in Ho Chi Minh City, which is scheduled to break ground on September 2, Vietnam’s National Day. The project is expected to create another 20,000 jobs.
The $900 million project will cover 50,000 square meters in Thu Thiem Peninsula, comprising a shopping mall, a hotel, office buildings, serviced apartments and a residential complex.
The Lotte Group chairman’s visit to Vietnam indicates “how serious Korea’s fifth-largest business group is about doing business in the Southeast Asian nation, now that it is near the completion of its withdrawal from China,” the Korea Times reported.
Last week, the paper quoted an unnamed Lotte Shopping official as saying the company was “actively operating overseas businesses in Vietnam and Indonesia.”
“In particular, the Vietnamese market shows steep growth in the retail business and there is still more room to grow. Korea has a good reputation in Vietnam that helps with our business there and people's income levels are rapidly growing too,” the official said.
Lotte Group’s affiliates are also building large-scale shopping complexes and residential apartments in Hanoi and Ho Chi Minh City.
In Ho Tay district, Hanoi, the company will complete the construction of the Lotte Mall Hanoi by 2023, Korea Times reported.
The group established Lotte Ventures Vietnam last year to support and develop Korean startups in Vietnam.
Lotte Shopping is closing its only Lotte Department Store left in China, located in Chengdu city. The company operated five branches in 2016, but has closed them one by one. The decision to sell its Chengdu branch, the last, was made at a board of directors meeting in July.
Once that department store is sold, Lotte will have withdrawn all of its business from China, once one of the most important markets after Korea and Japan, after entering the country 14 years ago.
President Phuc said he was pleased to see Vietnam and South Korea record important achievements in investment and trade ties, while bilateral political confidence has solidified.
South Korea leads FDI inflows into Vietnam at $80 billion, while bilateral trade turnover has hit $78 billion. The country is Vietnam’s third largest trading partner. About 200,000 Korean people live in Vietnam at present.
Vietnam, on a competitive basis versus China, other parts of Southeast Asia or India, offers a relative low-risk environment to do business, according to property consulting firm Savills.
Speaking at Forbes Vietnam’s recent business forum, Brian Lee, an economist at Malaysia's Maybank, commented that Vietnam, a rising star in the global supply chain, has the potential to become a new tiger in Asia.