South Korea's biggest supermarket chain E-Mart Inc on Thursday said it will close its stores in China after 20 years in the country, blaming ongoing losses and not tensions between Seoul and Beijing over North Korea's nuclear programme.
South Korea’s biggest supermarket chain E-Mart Inc on Thursday said it will close its stores in China after 20 years in the country, blaming ongoing losses and not tensions between Seoul and Beijing over North Korea’s nuclear programme. E-Mart will be the first major South Korean company to exit China since South Korea angered Beijing by deploying a U.S. missile defence system in April to counter threats from North Korea. South Korea has complained that some of its companies have faced a backlash in China as a result.
Chung Yong-jin, vice chairman of E-Mart parent Shinsegae Group, said on Wednesday the retailer would close its six stores in China once the leases expired.
The store closures were a purely commercial decision and had nothing to do with strained relations between China and South Korea, a company spokesman said on Thursday. E-Mart had entered the Chinese market in 1997.
Despite conciliatory language from both countries since the new administration of South Korean President Moon Jae-in began in early May, many South Korean companies say there has been no thawing in business relations.
South Korea’s duty-free industry has been particularly hard-hit, with store openings expected to be delayed amid a sharp drop in Chinese tourist numbers, a duty-free store lobby group said on Thursday. Almost 90 Lotte Mart stores in China remained closed as of Thursday, after South Korea’s fifth-largest family-run conglomerate agreed in February to provide land for the U.S. missile system.