Extraordinary Endeavors in Turbulent Times: Asian Innovation, Inclusion, and Impact during COVID-19

ASIA BUSINESS COUNCIL HONG KONG UNIVERSITY OF SCIENCE AND TECHNOLOGY Lotte Group (South Korea) Extraordinary Endeavors in Turbulent Times LotteGroup (South Korea) Embracing “Open Innovation” in E-Commerce for the Post Corona Era By Winnie Peng, Pauline Yeung, and Chun Hei Hung The following case study is based on written correspondence with Lotte Group in September 2020 and November 2020, and an interview with Tina Youhyun Choi, Team Leader of the Future Strategic Planning Team at Lotte Shopping, on October 6, 2020. Introduction “Since the launch of Lotte On, it has been evolving every day, every minute, every second,” exclaimed Tina Choi, Team Leader of Lotte Shopping’s Future Strategic Planning Team, six months after the e-commerce app was launched as a key component of Lotte’s “preparation for rebound in the post corona era.” 1 While Lotte Group is currently the fifth-largest conglomerate in South Korea involved in industries such as retail, food and beverage, chemicals, construction, and tourism, the success of the Lotte On app, Choi continued, “has become a matter of our business’ survival.” Indeed, as much as Lotte Group has engaged in traditional philanthropy in response to the coronavirus crisis, notably by donating 1 billion won (just under $1 million) to welfare facilities, providing food supplies to vulnerable children, delaying rents for small and medium enterprises, supporting local farmers in agriculture and fisheries, and providing support to countries like Indonesia and Pakistan, 2 the chaebol is very much focused on its business strategy for the post COVID-19 world. The pandemic brought forward the digital transformation of Lotte Group, as it has done for businesses globally. In April 2020, the Group’s retail arm, Lotte Shopping, launched Lotte On to integrate the online businesses of seven Lotte affiliates, namely Lotte Department Store, Lotte Mart, Lotte Super, LOHB’s (Love, Health & Beauty Store), LOTTE.com , Lotte Hi-Mart, and Lotte Home Shopping. 3 Asia Business Council Lotte Group Region South Korea Year of Founding 1967 Headquarters Seoul Type of Company Listed Company, Family Business Number of Employees 119,000 (South Korea 71,000, Overseas 48,000) as of June 2020 Total Revenues in 2019 (KRW) 74 trillion Total Revenues in 2019 (USD) 63.8 billion Major Businesses Retail, Food and Beverage, Chemicals, Construction, Manufacturing, Tourism, Finance COVID-19 Initiatives in a Nutshell Launch of E-Commerce App Lotte On; Support Programs for Small and Medium Sized Business Partners; Donation of COVID-19 Diagnostic Kits; Aid for Underprivileged Children, Elder Citizens and Healthcare Workers