South Korean retail giants withdraw from NFT sector amid market slowdown

Several South Korean retail giants, including Lotte and Hyundai, are exiting the non-fungible token (NFT), marking a significant change in its digital strategy.

The movement of companies follows a notable slowdown in the NFT marketleading them to refocus their plans on their core business competencies.

According to told a local South Korean media outlet, Lotte Home Shopping, the e-commerce arm of retail giant Lotte, announced that it would cease operations of its NFT store platform.

Lotte launched its NFT services on the platform in May 2022. However, after just two years, the company revealed on June 12 that it would cease NFT store operations on July 2.

The platform, integrated into the Lotte Home Shopping mobile app, was initially part of the company’s strategy to develop a metaverse platform.

Lotte’s NFT Shop was distinct in its approach by using fiat KRW as transaction currency to facilitate access for non-crypto users.

The company has expanded its NFT offerings by launching lines featuring its corporate character Bellygom and collaborating on projects with its virtual influencer Lucy and the 2022 hit horror film “The Witch: Part 2. The Other.”

Plans were also underway to enable secondary NFT sales on Opensea, the world’s largest NFT trading platform.

However, the recent closure means Lotte Home Shopping’s complete withdrawal from the NFT sector.

All remaining NFT business interests, including the Bellygom NFT, will be transferred to Daehong Communications, a crypto startup owned by Lotte Group.

Hyundai Department Store is another major retailer moving away from the NFT space. Launched in the same year as the Lotte platform, Hyundai’s NFT wallet services offered customers various incentives such as discounts and freebies. These services are being discontinued as the company chooses to exit the market.

Additionally, Shinsegae, another major player in the South Korean retail sector, has significantly scaled back its NFT offerings. An industry insider revealed that many retailers eagerly entered the NFT business, but are now scaling back their operations as market momentum wanes.

“Instead, they are focusing on strengthening the competitiveness of their core business areas,” the source added.

Meanwhile, the latest trend of retail giants exiting NFT markets follows South Korea’s changing stance on NFTs.

Notably, the country’s main financial regulator is seeking to classify certain NFTs as virtual assets.

The measure requires companies that issue NFTs classified as virtual assets to report them to the South Korean government body.

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