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2017-03-26 17:05
By Park Jae-hyuk

 


Lotte Group Chairman Shin Dong-bin faces a backlash from Korean consumers over his “eye for an eye, nationalism for nationalism” strategy to cope with China’s retaliation against the retail giant’s offering of a site for the deployment of a U.S. anti-missile system here.

Saying he loved China during an interview with the Wall Street Journal last week, the chairman described the country as the land of his ancestors ― the progenitor of his clan, Shin Kyung, came from China to Korea in the 12th century.

His remarks seem to be in line with recent moves by the nation’s fifth-largest conglomerate. The company recently posted promotional materials reading in Chinese, “we understand you, so we’re awaiting you” at Lotte department stores and 7-Eleven convenience stores. It also raised 360 billion won ($320 million) which will be used for Lotte Mart, which was forced to shut down 90 of 99 outlets in China for dubious reasons after unprecedented safety and sanitary checks by Chinese regulators.

Lotte’s measures have been taken to appease Chinese consumers’ anger and to deny speculation of the group’s withdrawal from the world’s most populous country.

However, the chairman’s remarks have drawn criticisms from Korean consumers who have been irritated by China’s economic retaliations. “What is Shin’s nationality? Chinese, Korean or Japanese?” an internet user said sarcastically, pointing out his poor fluency in Korean which had raised questions about the tycoon’s identity in 2015.


Before the dispute with China over the Terminal High Altitude Area Defense (THAAD), Lotte had been suspected of being a Japanese company due to questions surrounding the nationality of the owner family.

Having lost his Korean nationality after he was born in Japan, the chairman recovered his Korean nationality in 1996. There are disputes whether Shin gave up his Korean nationality or lost it without his knowledge. Also, Lotte founder Shin Kyuk-ho, his two sons including Shin Dong-bin and a grandson all married Japanese women, while the chairman’s daughter is expected to tie the knot with a Japanese announcer in May.

But the bigger reason for the suspicion was the conglomerate’s seemingly opaque corporate governance. Some critics speculate Lotte’s profits made here go to the Japan-based Lotte Holdings, the group’s de facto holding company.

In response to the criticisms, Lotte has continued to identify itself as a Korean firm, attaching a large Korean national flag to the exterior of Lotte World Tower and emphasizing national security as the reason it offered its golf resort for the THAAD deployment.

As a global enterprise, however, Lotte had to choose a better strategy locally and globally, rather than merely appealing to old-fashioned nationalism.

It may be true that Korean consumers’ anger against Lotte was partly attributed to questions surrounding the owner family’s nationality, but more people have been irked by the alleged corruption of the chairman’s family. Lotte’s five owner family members are facing a court ruling over their alleged embezzlement and malfeasance. Plus, the chairman is suspected of having given a bribe to former President Park Geun-hye to receive business favors.

Still, the conglomerate regards itself as a victim of the government, disappointing Korean consumers who may have no choice but to continue to criticize the conglomerate, saying “Lotte’s chairman belongs to the country where he can make money.”

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