Lotte Department Store, a major South Korean retailer, is ramping up its expansion in Southeast Asia, scouting new shopping mall locations as it looks to strengthen its overseas presence. The company plans to establish an International Headquarters (iHQ) to oversee regional operations, building on the success of Lotte Mall West Lake Hanoi, which opened in Sep 2023. By Jun 2024, the mall had generated over 200 billion won ($137 million) in sales and welcomed 10 million visitors in just 354 days. Lotte’s overseas sales surged 24.6% year-on-year in the third quarter of 2024. A Lotte Department Store official noted that the mall’s visitor count has already surpassed Hanoi’s population of 8.6 million, while its sales equate to 400,000 times the average monthly salary of a Vietnamese worker, estimated at 500,000 won ($342).
With domestic growth stagnating, South Korean retailers—including department stores, supermarkets, and convenience store chains—are aggressively expanding abroad, particularly in Southeast and Central Asia, where rising consumer purchasing power meets underdeveloped retail infrastructure. Lotte Group Chairman Shin Dong-bin reaffirmed the company’s global ambitions at a Jan 9 executive meeting, emphasizing that securing international footholds is a key priority for future growth. Shinsegae Group is also accelerating overseas expansion, pushing its supermarket chain E-Mart and private-label retail brand No Brand into new markets. Meanwhile, major convenience store operators, facing saturation at home, are racing to expand their footprint abroad.
This renewed push comes despite past struggles in foreign markets. South Korean retailers have historically faced challenges maintaining overseas operations, particularly in China. In 2017, China imposed economic retaliation over South Korea’s deployment of the U.S. Terminal High Altitude Area Defense (THAAD) system, prompting the withdrawal of several South Korean businesses. E-Mart, which entered China in 1997, exited in 2017. Lotte Mart, which once operated 119 stores in China, shut down in 2018 due to THAAD-related difficulties. Other attempts at expansion have also faltered—BGF Retail’s CU convenience store chain withdrew from Iran in 2018 due to U.S. sanctions, while its planned Vietnam entry in 2019 was derailed by the COVID-19 pandemic.
Still, with a prolonged domestic downturn, South Korean retailers are renewing their overseas focus. According to Statistics Korea, the country’s retail sales fell 2.2% in 2024, the steepest drop since 2003′s credit card debt crisis. This marks the third consecutive year of decline, following a 0.3% dip in 2022 and a 1.5% drop in 2023. Sales of quasi-durable goods, such as apparel, fell 3.7%, while non-durable goods, including food and beverages, dropped 1.4%. Even the once-resilient convenience store sector is seeing slower growth. Financial data provider FnGuide projects GS Retail’s total sales for 2023 will inch up just 0.06% year-on-year to 11.6 trillion won ($8 billion), while operating profit is expected to plunge nearly 30% to 275.7 billion won ($188.9 million). Analysts’ latest forecasts fall about 500 billion won ($342.63 million) short in sales and 120 billion won ($82 million) in operating profit compared to projections three months earlier.
In response, retailers are fast-tracking global expansion. Shinsegae Group is aggressively rolling out E-Mart and No Brand stores in international markets. In Dec 2024, E-Mart launched its first No Brand store in Laos, with plans to open 20 locations over five years. The company has also expanded its No Brand presence in the Philippines, where it now operates 16 outlets. To mitigate risks, E-Mart is using a master franchise model, partnering with local retailers rather than managing stores directly. Shinsegae Department Store is also reinforcing its presence in the Indochina region, planning to open its first Factory Store—a discount retail concept—in Laos in the first half of 2025.
Meanwhile, convenience store chains GS25 and CU have surpassed a combined 1,200 international locations. Both aim to expand their networks in Mongolia, Vietnam, and Malaysia to 500 stores each. GS25 currently operates 267 stores in Mongolia, while CU has 441 outlets in the country.
