South Korean retail and logistics firms are actively seeking a breakthrough in Southeast Asia to offset mounting losses in China caused by the ongoing diplomatic row between the two neighboring countries over Seoul’s host of a U.S. antimissile system.

Lotte Group on Tuesday (local time) opened iLotte, the first e-commerce platform in Indonesia with a mall-in-mall user interface, which allows the original site visitor to access a different online shopping mall. Visitors to the website will be able to buy products from Lotte Department Store, Lotte Mart and Lejel, Indonesia’s leading TV shopping operator. More than 1,000 brands will be sold on the online marketplace.

The new online shopping mall was jointly launched by Salim Group, Indonesia’s second-largest conglomerate, after the two companies recently formed PT Indo Lotte Makmur as a 50-50 joint venture company with the president from Lotte and the vice-president from Salim.

Also on the website is a special corner called K Shop, which sells Korean cosmetics including Sulwhasoo, Laneige, Etude House and Tony Moly and supports the sale of smaller Korean firms. Lotte said it plans to add Sports Planet, a brand from Indonesia’s largest fashion company MAP, and build up its online bookstore to make it the largest in the country.

The Korean conglomerate expected the new business would create greater cross-channel synergies with its other businesses in Indonesia. It currently runs one Lotte Department Store, 45 Lotte Mart stores, 30 Lotteria fast food restaurants, three Angel-in-us coffee shops and one Lotte Duty Free shop in the country.

The Korean retail giant’s venture into the Indonesian online shopping market comes after sales of Korean products in China have suffered since March due to a series of economic retaliations by Beijing against Seoul’s decision to deploy a U.S.-backed antimissile shield on the Korean soil.

Lotte Group has been in talks with multiple parties to sell Chinese operations of Lotte Mart after a majority of its stores have been forced to shut down on business suspension in a retaliatory move from Chinese authorities after the group yielded its golf course location to host the Terminal High Altitude Area Defense (THAAD) antimissile system. Another Korean retail giant E-Mart also declared its exit from China after 20 years of operations.

Retail companies are not the only Korean companies seeking opportunities outside China. CJ Logistics Corp. also said on Monday it acquired a 50.9 percent stake each in Gemadept Shipping Holding and Gemadept Logistics Holding - two core units of Gemadept, Vietnam’s largest logistics firm. The Korean company shouldered 70 percent of the 100 billion won ($87.8 million) investment with the rest paid by financial investors.

Founded as a state-owned entity in 1990, Gemadept was later privatized and has become Vietnam’s largest private logistics company. It has operations both at home and abroad and is involved in logistics centers, heavy lift transport and port cargo handling.

According to data from China and the Bank of Korea last month, Korean companies scaled back their investment in China by more than 40 percent this year due to foggy business prospects.

By Sohn Il-seon

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