South Korea’s tourism industry has been hit hard by a diplomatic row with China over the deployment of a US missile shield here that has sent the number of Chinese visitors tumbling, a report said Friday.
After being subject to incessant retaliation – including raids by safety authorities from the Chinese government – over its involvement in the deployment of American THAAD anti-ballistic missile defense systems, Lotte has finally given in to China’s pressure and initiated the sales process of its supermarket business in the Chinese market. Lotte will not refuse if the buyer wishes to acquire all the stores, the official said.
Lotte provided a golf course to Seoul for the THAAD missile-interception system installed by South Korea and the USA to defend against the North’s missile threats.
China may have suspended all online commerce for Lotte Mart in March, and dozens of Lotte Mart outlets remained closed because of the THAAD dispute.
The group’s key subsidiary, Lotte Mart, in March had to inject 360 billion won ($318 million) of emergency funds to keep the China stores afloat and recently made a decision to pour in an additional 340 billion won.
The industry is expected to see around 18.7 trillion won of losses, if calculated on a yearly basis and based on the average expenses spent by each Chinese tourist past year. Though the company’s retail business in China apparently was in the red even prior to the THAAD-related harassment, store closures spanning about half a year give Lotte no choice but to revamp its business strategy.
Lotte Mart’s parent company also operates 22 affiliates specializing in the production of snacks, beverages and chemicals, but their operations could also be susceptible to Chinese sanctions, according to the South Korean press report.