Business
Reasons behind Lotte Mart's low business performance
Lotte Mart is still under investment phase in Vietnam, thus its business performance has not reached expectation, said Jeong Seoung Won, Lotte Mart`s CFO in press release sent to local media on May 18.
Won said this is a normal practice applying for every business, in which the company has to accept short-term loss for long-term gain.
"We are confident that after the initial phase of investment, the company will reach its break- even point and generating profit in Vietnam. We will continue expanding business and comit long-term investment in the country," stressed Won.
According to Won, Vietnam's retail market remains huge potential in Asia, which is one of the main reasons for Lotte Mart to invest in the country.
As at the end of 2017, accumulated losses of Lotte Mart is reported at VND800 billion (US$35 million), according to its financial statement, while the company's equity is VND1.6 trillion (US$70 million).
Reasons for the losses come from a series of shopping mall put into operation by Lotte Mart since 2008. Consequently, Lotte Mart launched the first shopping mall in Ho Chi Minh in 2008, from 2009 to 2013, Lotte Mart opened 5 additional malls. In the next 3 years, Lotte Mart continued opening 7 malls and super markets.
In 2017, Lotte Mart launched online shopping app named Speed L and piloting the convenience store Speed L in April 2018. Won said, each shopping mall when put into operation would need an average from 5 - 8 years to reach a break-even point.
Since 2008 to present, Lotte Mart has invested VND8.9 trillion (US$389.3 million) for infrastructure development of 13 malls and super markets, as well as other business expenses including advertisement, marketing, promotion, administration.
Additionally, Lotte Mart is under fierce competition from competitors, resulting in low performance of those mentioned investments.
The presence of Lotte Mart in Vietnam, as Won said, has contributed to the development of Vietnam's economy, creating jobs for 3,000 direct employees, not to mention other indirect employees.
"Lotte Mart strives for developing a modern retail system, meeting customer demand and accompanying Vietnamese enterprises for a higher consumption rate of Vietnamese goods."
Lotte Mart's CFO expected the company to start having profit by 2020, emphasizing its long-term commitment to invest in Vietnam and following the country's laws and regulation.
Lotte Mart's CFO expected the company to start having profit by 2020 in Vietnam.
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According to Won, Vietnam's retail market remains huge potential in Asia, which is one of the main reasons for Lotte Mart to invest in the country.
As at the end of 2017, accumulated losses of Lotte Mart is reported at VND800 billion (US$35 million), according to its financial statement, while the company's equity is VND1.6 trillion (US$70 million).
Reasons for the losses come from a series of shopping mall put into operation by Lotte Mart since 2008. Consequently, Lotte Mart launched the first shopping mall in Ho Chi Minh in 2008, from 2009 to 2013, Lotte Mart opened 5 additional malls. In the next 3 years, Lotte Mart continued opening 7 malls and super markets.
In 2017, Lotte Mart launched online shopping app named Speed L and piloting the convenience store Speed L in April 2018. Won said, each shopping mall when put into operation would need an average from 5 - 8 years to reach a break-even point.
Since 2008 to present, Lotte Mart has invested VND8.9 trillion (US$389.3 million) for infrastructure development of 13 malls and super markets, as well as other business expenses including advertisement, marketing, promotion, administration.
Additionally, Lotte Mart is under fierce competition from competitors, resulting in low performance of those mentioned investments.
The presence of Lotte Mart in Vietnam, as Won said, has contributed to the development of Vietnam's economy, creating jobs for 3,000 direct employees, not to mention other indirect employees.
"Lotte Mart strives for developing a modern retail system, meeting customer demand and accompanying Vietnamese enterprises for a higher consumption rate of Vietnamese goods."
Lotte Mart's CFO expected the company to start having profit by 2020, emphasizing its long-term commitment to invest in Vietnam and following the country's laws and regulation.
