Lotte
Overview
Lotte is a representative large business group in South Korea, founded by Chairman Shin Kyuk-ho, who started the business in Tokyo, Japan in 1948. It operates in various fields including retail, chemicals, food, tourism, construction, and finance, wielding significant influence both domestically and internationally. The Lotte Group currently operates under a holding company system centered on Lotte Corporation, with major affiliates including Lotte Shopping, Lotte Chemical, Lotte Chilsung Beverage, Lotte Hotel, and Lotte Engineering & Construction.
Main Content
History and Founding
Lotte's history begins with 'Lotte Confectionery', established in Tokyo, Japan in 1948. Founder Shin Kyuk-ho achieved success in the confectionery business in Japan before entering South Korea in 1967 to establish Lotte Confectionery. Subsequently, in the 1970s, it expanded into retail and tourism by successively establishing Lotte Department Store and Lotte Hotel. In the 1980s and 1990s, it grew into a comprehensive business group by entering the heavy chemical and construction sectors through Lotte Chemical and Lotte Engineering & Construction.
Major Business Sectors
Lotte Group's businesses are broadly divided into retail, chemicals, food, tourism & services, construction, and finance.
- Retail: Representative examples include Lotte Department Store, Lotte Mart, Lotte Super, and Lotte Online Shopping, operated by Lotte Shopping. In particular, Lotte Department Store maintains a leading position in the domestic department store industry.
- Chemicals: Lotte Chemical focuses on producing petrochemical products and is competitive in the global market. In 2019, it expanded its global business by acquiring Westlake Chemical in the United States.
- Food: Lotte Chilsung Beverage produces carbonated drinks, alcoholic beverages, and bottled water, while Lotte Confectionery is famous for chocolates, candies, and ice cream. Theme parks like 'Lotte World' are also key in the tourism sector.
- Tourism & Services: Lotte Hotel operates hotels in major cities both domestically and internationally, and Lotte Duty Free has recorded the highest sales in the global duty-free industry.
- Construction: Lotte Engineering & Construction engages in various construction projects including housing, civil engineering, and plants. Notably, 'Lotte World Tower' has become a landmark in Seoul.
- Finance: Includes Lotte Card and Lotte Insurance, with a recent focus on strengthening digital financial services.
Governance Structure and Management Disputes
Lotte Group is famously known for its complex governance structure involving the founding family. In 2015, a management dispute between Chairman Shin Kyuk-ho's siblings and sons surfaced, leading to an incident referred to as the 'War of the Princes'. During this process, Chairman Shin Dong-bin took control of the group, but controversies over governance restructuring continued. In 2017, the group transitioned to a holding company system in an effort to enhance transparency.
Social Contributions and Controversies
Lotte engages in various social contribution activities. It fosters talent through the Lotte Scholarship Foundation and supports underprivileged groups through the Lotte Welfare Foundation. Additionally, as part of sports marketing, it operates Lotte Giants (baseball) and Lotte Challengers (volleyball), strengthening ties with local communities.
However, Lotte has also been embroiled in several controversies. In 2016, it faced a prosecution investigation over corruption allegations related to the political scandal, and in 2018, Chairman Shin Dong-bin was arrested on charges of management corruption. Furthermore, issues of unfair internal transactions and contract favoritism in some affiliates have drawn criticism regarding the transparency of corporate governance.
Latest Trends
As of 2024, Lotte Group, under Chairman Shin Dong-bin, is focusing on portfolio restructuring and digital transformation. In the retail sector, it is enhancing competitiveness by strengthening online channels and logistics innovation, while in the chemical sector, it has set goals for eco-friendly material development and carbon neutrality. In 2025, Lotte Chemical plans to fully enter the hydrogen economy, and Lotte Shopping intends to introduce AI-based personalized shopping services. Additionally, Lotte Hotel continues its global expansion, strengthening its presence in the Southeast Asian market. Meanwhile, Lotte is reinforcing ESG management and striving for sustainable growth.
Related Topics
- [[Shin Kyuk-ho]]
- [[Shin Dong-bin]]
- [[Lotte Group]]
- [[Lotte Department Store]]
- [[Lotte Chemical]]
- [[Lotte Hotel]]
- [[Lotte World Tower]]
- [[Chaebol in South Korea]]
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