02:38 (GMT +7) - Monday 21/08/2017

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Vietnam gives Lotte space to grow

Released at: 08:50, 11/08/2017

Vietnam gives Lotte space to grow

Mr. Dong-Bin Shin. Photo: Duc Anh

Chairman of the Lotte Group, Mr. Dong-Bin Shin, spoke exclusively with VET about the South Korean giant's upcoming business plans in Vietnam.

by Hai Van

The Lotte Group launched its smart city project in Ho Chi Minh City last month. What are the major factors behind the company’s expansion plans in Vietnam?

Actually, it’s quite a long story. In the middle of the 1980s our honorable Chairman, who is my father, visited Vietnam for the first time. He thought: “Wow, this country is going to be a regional superpower in the future.” That was my father’s opinion at the time and I share the same opinion. He thought that he really had to make investments in Hanoi or Ho Chi Minh City. At the time, I believe, the population of Vietnam was around 80 million. Now it’s approaching 100 million, or double the size of South Korea’s.

So what factors are behind Lotte Group’s expansion in Vietnam these days?

Well, at that time our major investments were in Japan and South Korea. However, the growth rates in those two countries had been going down. Also, their populations were aging. Compared to them, I believe Vietnam’s population is very young. The economy and the population growth in Vietnam are two other reasons. I think it is necessary for us to go outside of South Korea and Japan, to new growing countries like Vietnam. In my view, Vietnamese people are young and hard working.

Why has Lotte launched its smart city project at this time?

We recently built the fifth-tallest building in the world, in South Korea, called Lotte World Tower. It’s 555 meters high with 123 stories. It received a Gold Rating in the US Green Building Council’s Leadership in Energy and Environmental Design (LEED) system. Energy efficiency in skyscrapers is usually not very good, but our building received a Gold Rating. We believe we possess certain knowledge and know-how about how to conserve not only energy but also waste, wastewater, and dirt as a full package. Many South Korean companies, as well as many Japanese companies, possess very good know-how and technology on how to save energy. Electricity costs are high in Vietnam, as is the temperature. We try to use our know-how and technology in a way that is good for this country and also good for us. We also try to transfer that know-how to Vietnam. If you stay in one of our apartments, you will see that your electricity bill will be less than in other apartments.

The Lotte Group has invested in a wide range of businesses in Vietnam, from confectionery and FMCG to retail, property and other fields. Which sector is the group’s most profitable in Vietnam?

I think it is retail. As you may have seen, we have many Lotte Marts in Ho Chi Minh City and Hanoi and the number is growing.

But I haven’t seen very many Lotte Marts in Vietnam.

There are currently 13 Lotte Marts nationwide, and I believe the number will increase in the next couple of years.

Do you think the number will be increased? By how many?

Definitely! I think maybe two or three this year. We are going to expand continuously. Vietnam’s middle class is huge and young, which is very good. If you go to a Lotte Mart or our department stores, most customers are in their early 20s and 30s. If you go to South Korea or Japan, our customers are in their 50s and 60s.

Does Lotte Group have any plans to develop integrated shopping malls in Vietnam?

Yes, we do. These consist of department stores and hyper markets and also some shopping malls and theaters. We have several candidates for these types of huge shopping centers in Ho Chi Minh City as well as in Hanoi and also some in other areas.