The Korea Herald


E-Mart to rev up China business, ends store closures

By KH디지털2

Published : Aug. 5, 2015 - 11:16

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E-Mart Inc., South Korea's largest discount grocer, said Wednesday it aims to end the restructuring of its Chinese business and focus on improving it, but skeptics remained negative on the company's operations in China.

The retail giant, which once operated as many as 27 branches in the country, has been shutting down stores in the past five years, spurring speculation it may even exit from the Chinese market.

"With the Aug. 3 closure of a branch in Shanghai, there will be no additional shutdowns of the remaining eight branches in east China," said a media official at the Shinsegae affiliate.

"The region continues to be one of the most profitable regions and some of our branches there are even posting a profit. China is a market that we cannot give up," the official said.

Following a massive 111.4 billion won ($95.2 million) loss in 2011, the company's China unit has remained in the red for several years. In the first three months of this year, its net loss reached 12.1 billion won.

The company projected its net loss to improve 35 percent on-year this year as the restructuring efforts are nearing an end and as it moves to bolster its online Chinese-language shopping platform.

But some market watchers raised doubts about the company's plan to stay in the country.

"The company is expected to close down its remaining stores as the market there is pretty tough," said one analyst, asking not to be named. "Its entrance into other countries is a more positive scenario since the market there is still growing."

South Korean retailers, including E-Mart and its smaller rival, Lotte Mart, have been struggling to stay afloat in the Chinese market, where competition from local retailers as well as e-commerce operators is fierce.

E-Mart does not operate overseas branches outside of China.

The company plans to launch its first branch in Vietnam in December and is looking into opening more stores in Vietnam and Mongolia as early as next year, according to company officials. (Yonhap)