Lotte pivots to Vietnam for regional growth as Hanoi mall opens

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Lotte pivots to Vietnam for regional growth as Hanoi mall opens

Published: 21 Sep. 2023, 16:30

SEO JI-EUN
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Exterior view of Lotte Mall West Lake Hanoi ahead of its grand opening this Friday [LOTTE SHOPPING]

HANOI — The planned opening of Lotte Mall West Lake Hanoi, set for Friday, represents the Korean retail giant's shift toward the Southeast Asian country amid the downsizing in China and stagnant sales in Korea.

The complex boasts a total floor area of approximately 354,000 square meters, equivalent to 50 football fields. It integrates capabilities across various Lotte subsidiaries, encompassing sectors like distribution, tourism, leisure and construction.

"We are introducing a range of brands [such as Nike Rise and Masimo Dutti] making their debut in Hanoi or Vietnam, along with flagship concept stores [like TAT Golf and Dyson] — constituting more than one-third of the total brands," said Kim Sang-hyun, the CEO of Lotte Shopping, during a press conference at the mall on Wednesday. "Furthermore, as a mixed-use commercial complex, our group companies have collaborated to create synergies. Our goal is to establish this as a landmark in Vietnam."

The multi-story mall spans seven floors and houses a lineup of 233 brands. Beyond shopping, the complex offers a variety of dining options, including Korean cuisine restaurants. Below ground, visitors can explore Lotte Mart and Lotte World Aquarium, while the upper floors cater to entertainment with a cinema and a dedicated kids' zone. Additionally, the complex includes a 23-story, 5-star hotel under the L7 brand as well as an office building.

Lotte Mall West Lake had a pre-opening event in July, with approximately 60 percent of the brands open at that time. However, for the upcoming grand opening this Friday, it is anticipated that over 90 percent of the brands will be operational. Since the pre-opening, Lotte Shopping reported that nearly two million visitors have already visited the main facility of Lotte Mall West Lake — suggesting roughly one in every five Hanoi residents has visited the complex.

Kim Joon-young, general director of Lotte Properties Hanoi, far left, along with other executives from Lotte Mall West Lake Hanoi, answer questions from journalists during a press briefing at the shopping mall on Wednesday. [LOTTE SHOPPING]

Lotte Group selected Hanoi as its target destination, citing a comparatively less saturated market compared to the highly competitive landscape in Ho Chi Minh City. While Ho Chi Minh City has seen the entry of numerous overseas competitors like Japan's Takashimaya, Taiwan's Crescent Mall, and Singapore's Vivocity, Hanoi's retail market comprises local and Japanese companies.

"A distinctive feature of Hanoi is that commercial facilities aren't concentrated in one area like in Korea or Ho Chi Minh City, but they're spread out across the city," said Kim Joon-young, general director of Lotte Properties Hanoi. "In the Old Quarter, you'll find Vincom, mainly operated by Vingroup, and on the city's outskirts, Japanese Aeon Malls are a notable example of shopping facilities."

Lotte Shopping emphasizes its unique content offerings as a significant factor setting it apart from competitors like Vincom and Aeon Mall.

"We don't view Vincom as a direct rival. They function more as developers rather than retailers and primarily engage in real estate leasing," explained the general director. "In contrast, 40 percent of our brands and content are unique to the Vietnamese market, encompassing investments in design and exclusive content within the complex."

Lotte Shopping has set a revenue target of 80 billion won ($59.7 million) by the end of this year, and to establish the West Lake mall as the "foundation in the Southeast Asian market."

"We've deliberated how to position the Lotte brand as a premium brand in markets with growth potential, such as Vietnam and nearby countries like Cambodia and Laos," said Chung Joon-ho, the CEO of Lotte Department Store.

"Our approach is to create a shopping mall complex that goes beyond the typical shopping focus by incorporating various Lotte Group affiliates, including markets, aquariums, and cinemas. Ultimately, our goal is to include Lotte E&C's housing business," Chung added.

The West Lake area, where Lotte Mall West Lake is located, is regarded as a traditional upscale neighborhood in Vietnam. With continuous developments such as satellite cities like Ciputra and Nhat Tan, as well as diplomatic zones in the vicinity, Lotte Shopping anticipates that the area will transform into Hanoi's primary commercial hub within the next decade.

The grand opening ceremony of Lotte Mall West Lake, scheduled for Friday, will be attended by Lotte Chairman Shin Dong-bin, top executives from the conglomerate's affiliates, including Lotte E&C, Lotte Department Store, and Lotte Mart, as well as high-ranking Vietnamese officials.

BY SEO JI-EUN [[email protected]]