What it takes to build Korea’s 5th biggest company

If you grew up or lived in Asia, you’re likely to have consumed a LOTTE confectionary product. Yet, while the company is known for its Choco Pie and Pepero, confectionary is just one of many things under the LOTTE group. While the company had its beginnings as a chewing gum manufacturer, LOTTE group was formally established in 1967 and has since grown to become Korea’s fifth biggest conglomerate encompassing four key business areas including LOTTE Food & Beverage, LOTTE Retail, LOTTE Chemical / Engineering & Construction and LOTTE Tourism & Service with 93 affiliates. The company is in over 30 countries, including both developed and developing, around the world. 

LOTTE is in over 30 countries around the world

There have been many milestones in LOTTE’s 50-year-plus history. At the heart of the brand is perhaps a willingness to innovate⁠—be it technological or forays into new industries. From the mid-60s to late-70s, the group significantly expanded beyond its chewing gum business into food and beverage, retail and chemical industries. It marked the 2000s with the acquisition of new retail formats, both on- and off-line, and the expansion of an already robust portfolio to financial services. During the 2010s, it actively sought new mergers and acquisitions, allowing it to broaden its reach in high-potential developing markets. 

These achievements are metaphorically encapsulated by the opening of the LOTTE World Tower in April 2017. At 555 metres, the 123-floor Tower is the tallest building in South Korea and the 5th tallest in the world. 

LOTTE World Tower, the tallest building in South Korea

Localisation as strategy

Occupying a covetable no. 35 on Campaign Asia’s Top 1000 Brands list, LOTTE is present in over 30 countries in Asia and Europe, and is still expanding its business, particularly in the Americas and emerging economies. One of the reasons why LOTTE is able to expand so successfully is through localisation--of both its businesses and individual products. LOTTE F&B is particularly strong in Indonesia and Myanmar for example, whereas LOTTE Chemical Engineering appears to dominate in markets like Malaysia, USA and Indonesia. With regards to the latter, a notable example include the group’s acquisition of Belgium chocolatier Guylian for $164 million in 2008. Not only does it allow the group to enter the Belgium market, it also allows it to enter the market leveraging the economies of scale⁠—LOTTE didn’t have to build up a new brand from the ground up. 

Creating value in communities 

But LOTTE isn’t only shooting for commercial success⁠—it also wants to be a brand that is recognised for doing good to the markets it is in. To that end, the company is exercising its branding prowess through its corporate social responsibility initiatives. 

One such initiative is LOTTE-KOICA Service Training Centre, where LOTTE partnered KOICA and the Ministry of Trade, Industry and Energy to launch a retail training centre. Aside from helping job seekers, students, traders and low-income groups learn foreign languages, computer and management skills, the centre also provides trainees with the opportunity to work for LOTTE Mart, LOTTERIA and Hotel.  Another initiative is LOTTE School, which sees LOTTE Department Store opening schools in Vietnam’s low-income areas. The initiative now supports three schools in Da Nang, Hanoi and Ho Chi-Minh.