South Korea's Lotte Group shut its online store at Tmall, China's leading electronic marketplace, on Jan. 12 soon after closing three retail stores in China due to poor sales and their country's deteriorating relations with China.
Lotte, which opened its store in Tmall lin 2015, has been in China for more than two decades. It has 115 supermarkets and five shopping malls in China, which accounts for over 60 percent of its overseas investments.
The company faced stiff competition in its online and brick-and-mortar stores in China.
Many foreign retailers in China like British supermarket chain Tesco and U.S. electronics giant Best Buy have been closing due to the competitive environment. However, closure of online shops of foreign retailers is far less common.
Furthermore, work was stopped on Lotte's multibillion-dollar construction project in Shenyang that included homes, a mall, hotel and theme park. A department store project in Shanghai, jointly set up with Citic Group, will open in March.
The Lotte Group has been dragged into the controversy over China's opposition to Seoul 's U.S.-supplied missile defense system, which it set up as protection against attacks from North Korea. China is concerned that the system could be used for spying.
The Seoul-based group, founded in Tokyo in 1948 by Shin Kyuk Ho, is a household name in South Korea where it operates hotels, amusement parks, department stores, duty-free shops, shopping malls, multiplexes, burger joints and coffee shops.Its combined assets are valued at over $90 billion.
The Lotte Group has been in the limelight since last year due to a feud between the founder's two sons, Shin Dong Bin, the company's chairman, and his older brother Shin Dong Joo. The two battled it our for control of the conglomerate and publicly attacked on each other.