Lotte Mart buys out PT Makro Indonesia

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Lotte Mart buys out PT Makro Indonesia

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The exterior of a PT Makro store in Bandung, Indonesia, which will soon be turned into Lotte Mart. Provided by Lotte Shopping


Lotte will be the first local company to set foot in the Southeast Asian retail market.

Leading department store chain Lotte Shopping Co. announced yesterday that it will buy a 75 percent stake in discount store chain PT Makro Indonesia for 294 billion won ($223 million).

Lotte’s affiliate in Singapore, Lotte Shopping Holdings Pte, is set to buy the remaining 25 percent stake. PT Makro Indonesia will be wholly owned by Lotte at 385.9 billion won and all stores will be renamed Lotte Mart.

PT Makro Indonesia, which operates 19 stores in the country, is owned by Dutch wholesaler SHV Holdings. SHV in July said that it would sell its stake in PT Makro Indonesia to expand their business in Thailand and hired HSBC Holdings to find a buyer for the discount chain.

PT Makro Indonesia launched in 1991 and last year saw 478.3 billion won in sales. This year, the company expects sales to increase by 22 percent.

“The discount store market in Korea is going to be saturated in the near future,” said Nho Byung-yong, head of Lotte Mart. “This acquisition signals the company’s participation in the rapidly developing retail sector in Asia.”

With this purchase, Lotte Mart now has 27 branches overseas, including eight in China bought last December from Makro China, as well as 58 branches in Korea. The company also plans to open a Lotte Mart store in Vietnam later in the year.

Shinsegae-owned discounter E-Mart is neck-and-neck with Lotte with 16 branches in China and 117 branches in Korea.

At present, although discounters including France-based Carrefour, Makro, Hong Kong-based Dairy Farm and Indonesian discount chain Matahari are in Indonesia, their market share in the whole retail sector is only 8 percent.

“Indonesia’s retail sector is fourth globally in population with high economic growth in the 6 percent region. The country’s retail industry is growing around 10 percent annually, and its discount store sector is growing 30 percent every year,” stated Lotte Shopping.



By Cho Jae-eun Staff Reporter [jainnie@joongang.co.kr]
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