In a notable shift in digital strategy, several South Korean retail giants, including Lotte and Hyundai, have decided to withdraw from the non-fungible token (NFT) sector amidst a slowdown in market activity.
Lotte’s Strategic Retreat
Lotte Home Shopping, the e-commerce arm of retail powerhouse Lotte, made headlines with its decision to cease operations of its NFT shop platform. Launched in May 2022 within the Lotte Home Shopping mobile app, the platform was initially part of Lotte’s broader strategy to explore opportunities in the metaverse.
Distinctively, Lotte’s NFT Shop allowed transactions using fiat KRW, aiming to attract non-crypto savvy users. Despite efforts to diversify its NFT offerings with lines featuring corporate character Bellygom, collaborations with virtual influencer Lucy, and tie-ins with popular films like “The Witch: Part 2. The Other One,” Lotte announced the closure of its NFT operations on July 2, signaling a complete exit from the sector.
Remaining NFT assets, including Bellygom NFTs, will be transferred to Daehong Communications, a crypto startup under the Lotte Group’s umbrella.
Hyundai’s Exit Strategy
Similarly, Hyundai Department Store, which launched its NFT wallet services in 2022 offering customers incentives such as discounts and free gifts, has opted to discontinue these services and exit the NFT market. This decision aligns with Hyundai’s strategic realignment towards its core business areas.
Industry-wide Adjustment
The trend extends beyond Lotte and Hyundai, with Shinsegae, another prominent player in South Korea’s retail sector, also scaling back its NFT offerings. Industry insiders attribute this retrenchment to the waning momentum in the NFT market, prompting retailers to refocus efforts on strengthening their core business competencies.
“Many retailers eagerly ventured into the NFT business during its peak, but now they are recalibrating their strategies,” noted an insider familiar with the industry. This strategic pivot comes amid broader regulatory developments in South Korea, where authorities are considering classifying certain NFTs as virtual assets, imposing regulatory reporting requirements on issuers.
As South Korean retail giants redirect their energies away from NFTs, the landscape of digital asset adoption and regulation continues to evolve, shaping the future trajectory of blockchain-based innovations in the region.
