South Korea’s Lotte opened a large retail complex in Hanoi on Friday following an investment of $643 million, in a strategic pivot to focus on Vietnam after deciding to withdraw from the Chinese market.
Lotte is also constructing a shopping complex in Ho Chi Minh City in the south, competing with Japan’s Aeon Mall and other local companies to attract Vietnamese consumers. The South Korean conglomerate hopes to make Vietnam a source of growth, following its path at home and in Japan.
Lotte Group Chairman Shin Dong-bin, speaking at the opening ceremony, said that the company intends to expand its investment in the country “alongside Vietnam’s economic growth.”
Since entering the market in 1996, Lotte’s investments in Vietnam have accumulated to an approximate total of $2.4 billion. Many of the group’s executives, including President Genichi Tamatsuka, attended the opening ceremony of the new facility.
The complex, “Lotte Mall West Lake Hanoi”, covers a total floor area of 354,000 sq. meters, with 233 stores in its shopping mall. There will be a cinema equipped with nine screens and a total of 1,007 seats, and a basement aquarium featuring 400 species of marine life. The attached hotel has 264 rooms and another 192 for residential use.
Tran Sy Thanh, chairman of the Hanoi People’s Committee, praised the facility as “a symbol of cooperation” between Vietnam and South Korea.
The facility is located on the north side of the West Lake (Ho Tay) area, near central Hanoi, which also has easy access to Noi Bai International Airport. Being one of the most popular areas in the capital city, it is home to many wealthy Vietnamese, as well as Japanese, South Korean and other expatriates.
The “Lotte Center Hanoi,” a 65-story skyscraper, has already opened in Hanoi. The glass exterior, which stretches over 250 meters high, draws the eye around the city. Lotte is investing $900 million in the complex that is set to open in 2028 in Ho Chi Minh City, a commercial city in the country’s south.
Behind this concentrated investment in Vietnam lies the company’s bad experience in China, where the conglomerate had previously been focusing. In 2017, China became enraged when Lotte offered land it owned in South Korea for the deployment of the U.S. military’s ground-based missile interceptor system (THAAD). The incident led to the suspension of Lotte’s supermarket operations in China and the outbreak of boycotts of its facilities. In 2022, Lotte decided to withdraw from the country.
Currently, popular go-to retail locations in Vietnam are Aeon Malls. There are two locations in the suburbs of Hanoi, and in some cases, bus services are provided from apartment buildings to an Aeon Mall. There is also a center from local mall operator Vincom in a prime location in central Hanoi.
Vietnam’s consumer power is accelerating year by year, through the combination of a population of 100 million people and economic growth. While Lotte’s new West Lake mall has rich entertainment elements, such as an aquarium and cinema screens, Aeon Mall has established a reputation for its food offerings, including Japanese fare, which many locals have come to love. The two companies will be competing for customers with their respective advantages.
Source: Nikkei Asia
