According to the Korean Times, South Korea’s retail giant, Lotte, officially pulled its business out of China altogether and focused on the Southeast Asia market, including Indonesia and Vietnam.
On Sunday, May 22, Lotte announced that it would close its headquarters office in China in the first half of this year. Most of the employees have been relocated to South Korea, and the only remaining process is to cancel its business license in the country.
The company’s move started in 2019 as Beijing continued retaliation against Korean firms after South Korea decided to station a U.S. anti-missile battery in 2016.
Lotte is the main target of the diplomatic tensions between Beijing and Seoul over installing an anti-missile Terminal High Altitude Area Defense (THAAD) in 2017 on its golf course.
Since then, the Chinese regime has incited a widespread boycott of Korean firms, causing the company substantial loss. In addition, Beijing also keeps imposing stricter regulations on the company’s operations in the country.
The company entered China in 2004 and has invested nearly 10 billion dollars in its business. As of 2017, Lotte had 130 stores in China before it decided to pull out.
A major online accommodation booking firm from the U.S., called Airbnb, also announced closing its domestic operations in China.
The company plans to remove all its Chinese listings by this summer.
CNBC reported that Airbnb established its business in China in 2016. The company has since faced increasing competition from domestic firms, and the sector was already costly and hard to run in the country. In addition, the Covid-fighting measures from Beijing only worsened these issues.
Airbnb co-founder Nathan Blecharczyk told CNBC that stays by people in China on the company’s platform only have accounted for about 1% of revenue over the last few years. Airbnb will continue to run an office in China to focus on those wanting overseas stays.
The company decision came after prolonged Covid-related lockdowns in China that hurt both foreign-invested firms and local businesses.
Earlier this week, Apple reportedly told its contract manufacturers to increase production outside China.