South Korean retail giant, Lotte Group has recently launched a new joint venture in Singapore to integrate the operations of its Korean and Japanese food businesses, and to spearhead its expansion in Asia.
The joint venture, formed by Korea’s Lotte Wellfood Co. and Japan’s Lotte Confectionery, will serve as the control tower for formulating strategies on joint marketing, procurement, brand development, and expansion into new markets. This will also help to consolidate management and decision-making functions, which were previously handled separately.
The 2 companies have already completed board approvals and all required merger review procedures with the relevant authorities, according to the conglomerate.
This move is part of the ‘One Lotte’ strategy for deeper cooperation between the Korean and Japanese businesses, emphasised by its Chairman Shin Dong-bin. The strategy also aims to make overseas operations a key driver of future growth.
The joint venture will actively pursue the development of additional global mega brands capable of generating more than Won 1 trillion (US$665 million) in overseas sales. Pepero, a thin chocolate-covered stick cookie, which posted sales of Won 243 billion (US$161.6 million) last year, is being developed as the first such brand, while Xylitol and Choco Pie are considered the 2nd and 3rd candidates.
The 2 companies also plan to strengthen their buying power by jointly purchasing raw materials such as cocoa.
They also intend to move away from their previous strategy of dividing overseas markets by region for market entry, and instead jointly expand into new markets with strong growth potential.
In 2025, Lotte Wellfood saw 14.4% growth in overseas sales to Won 1.2 trillion (US$798 million), while Lotte Confectionery recorded Won 900 billion (US$598.7 million) in overseas sales, mainly in Vietnam and Indonesia.
