Late Movers’ MarketEntry Strategies in the Chinese Retail Market: The Case of a Korean Company

Abstract

Purpose - This study aimed to analyze the strategy of late domestic entrants into the Chinese retail market, focusing on the case of Lotte-Mart, given that there are few studies on market entry strategies of domestic retail companies in China. Research Design, data, methodology - The methodology of this paper is a case study approach, focusing on literature reviews and a few interviews. We conducted a surveyby disseminating questionnaires and conducting interviews focusing on the Chinese retail market, and analyzed Lotte-Mart’s market entry strategy in China. Results - Lotte-Mart chose M&A as the mode of entry, pursuing quick market entry and rapidexpansion. It chose small to medium size cities with relatively less competition. Subsequently, Lotte-Mart devoted significant effort towardslocalization, attempting to organize stores and assorting products to fit the Chinese consumers’ preferences. It operatedCSR programs to increase its brand awareness and to create a favorable brand image. Conclusions - Lotte-Mart now needs to devise alternative corporate strategies for businessexpansion and growth. An understanding of the Chinese retail market and the case study analysis of Lotte-Mart’s market entry strategy offers significant insightsfor domestic retail companies looking to expand into China.