Trade Practice Strategy for Foreign Direct Investment of Korean Companies in Vietnam

This paper aims to explore strategy of Lotte Shopping and demonstrate factors of success in Vietnam. Based on compounding and multi-channelization strategies, Lotte Shopping have achieved success in Vietnam. The economy of Vietnam is growing at a constant and rapid rate. From 2010 to 2015 the GDP grows constantly and the figures doubled in those five years. The GDP per capita also has been growing at a fast rate. The growth of exports, imports and GDP play a key role in increasing the purchasing power. Lotte Shopping entered the Vietnamese Market in 2007 and is now facing challenges such as a fierce competition from other foreign and local corporations. Its significant success on the Vietnam market comes from its compounding and multi-channelization strategies based on its success in Korea. As results, in Vietnam Lotte is expanding to Mart, Cinema, Home shopping, Department Store and Logistics. Lotte Shopping's multi-channelization strategy is very synergistic both at the corporate level and at the customer level. First, companies have a great advantage in diversifying risk through multi-channelization strategies. Second, the combination of shopping and shipping allows cutting cost and selling goods at a lower price. In addition, the expansion of the shopping market to the home shopping market as well as the online and off-line markets enables economies of scale. On the other hand, customers are able to purchase goods from Lotte Shopping through a variety of channels, which is highly likely to satisfy various demand for goods concerning their prices.