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 Joong Ang Daily [jainnie@joongang.co.kr]
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